Suppose you decide that the Bear Company stock is selling at too high a price at its current $50 per share price. You are convinced that the price of Bear stock will fall in the next couple of months, so you decide to sell 100 shares of Bear stock short. Ignoring transactions costs, if the Bear Company does not pay dividends, what is your profit or loss if the stock’s price goes to: $40 and you buy at that price to cover your short?

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Q: How do you solve a,b, and c?

A: a)The computation of profit is as follows:Hence, the profit is $14025.

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Q: Can you answer b please

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