Suppose you sold short 60 shares of Cityscapes Industries at $42 per share. You cover your...
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Suppose you sold short 60 shares of Cityscapes Industries at $42 per share. You cover your position when the price hits $29 per share. Cityscapes Industries pays a dividend of $0.25 per year. The initial margin is 75% and the maintenance margin is 55%. What is your return on your investment? Remember that a dividend reduces the "cash you get" when you cover your short position. Suppose you sold short 60 shares of Cityscapes Industries at $42 per share. You cover your position when the price hits $29 per share. Cityscapes Industries pays a dividend of $0.25 per year. The initial margin is 75% and the maintenance margin is 55%. What is your return on your investment? Remember that a dividend reduces the "cash you get" when you cover your short position.
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To calculate the return on your investment from the short sale we need to consider the initia... View the full answer
Related Book For
Income Tax Fundamentals 2013
ISBN: 9781285586618
31st Edition
Authors: Gerald E. Whittenburg, Martha Altus Buller, Steven L Gill
Posted Date:
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