Problem 3: Short Selling [12 points] A hedge fund manager has a negative view of retail stocks right now based on the belief that Amazon will drive many retailers into bankruptcy. To act on his view, the manager sells short 20,000 shares of Macy's (M). The manager finds a broker willing to lend the shares. The current market price is 36.00 and M pays quarterly dividends of S0.22 per share. Assume the next dividend takes place 3 months from today, and subsequent dividends follow the same pattern. a. 3] Assume the manager maintains the short sale for 6 months. List all transactions b. [3] What is the profit (loss) on the short sale if the market price of M is $46.00 when the c. [3] What is the profit (loss) on the short sale if the market price of M is $26.00 when the d. 3] Now assume the investor pays approximately $1.00 per share over the 6 months to involved in the short-sale, holding the position, and closing it out after 6 months. manager closes the position after 6 months? Assume there is no fee to borrow the stock. manager closes the position after 6 months? Assume there is no fee to borrow the stock. borrow the stock. Re-compute your answers to b. and c. incorporating that fee