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ish on Gator Inc., and short sell 50 shares at $120/share. Your broker requires that you post margin equal to 50% of the initial short sell proceeds, a the borrowed stock. While your short position is open, Gator pays a dividend of $2/share. You cover the short one year after entering the positio to $80/share. What is your rate of return? (Note: enter the answer in percentage points rounded to 2 decimal places; e.g., a return of -12.34% shot

ish on Gator Inc., and short sell 50 shares at $120/share. Your broker requires that you post margin equal to 50% of the initial short sell proceeds, a the borrowed stock. While your short position is open, Gator pays a dividend of $2/share. You cover the short one year after entering the positio to $80/share. What is your rate of return? (Note: enter the answer in percentage points rounded to 2 decimal places; e.g., a return of -12.34% shot

Essentials Of Investments
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
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am. 105.

You are bearish on Gator Inc., and short sell 50 shares at $120/share. Your broker requires that you post margin equal to 50% of the initial short sell proceeds, and charges a 1% annual fee on the borrowed stock. While your short position is open, Gator pays a dividend of $2/share. You cover the short one year after entering the position, when the price has dropped to $80/share. What is your rate of return? (Note: enter the answer in percentage points rounded to 2 decimal places; e.g., a return of -12.34% should be entered as -12.34)
Transcribed Image Text:You are bearish on Gator Inc., and short sell 50 shares at $120/share. Your broker requires that you post margin equal to 50% of the initial short sell proceeds, and charges a 1% annual fee on the borrowed stock. While your short position is open, Gator pays a dividend of $2/share. You cover the short one year after entering the position, when the price has dropped to $80/share. What is your rate of return? (Note: enter the answer in percentage points rounded to 2 decimal places; e.g., a return of -12.34% should be entered as -12.34)
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