Question: There is no missing information. A speculator thinks that a particular share that is now selling at $500 is likely to decrease in price to

There is no missing information.

A speculator thinks that a particular share that is now selling at $500 is likely to decrease in price to $450 in six days. The speculator does not own the share.

(i)Represent on a timeline the whole strategy she could initiateat onceusingcoveredshort-selling.[Each transaction should show the order and the delivery. To avoid overcrowding the time line, represent the order and the trade as one operation.]

(ii) Assume she manages to sell at $500 and the price of the share six days later is actually $530. Calculate the profit the strategy in (i)generates.

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