4. You decide to sell 100 shares of Topgun Enterprises Inc. short when it is selling at itsyearly high of $42.25. Your broker tells you that your margin requirement is 60 percentand that the commission on the sale is $20. While you are short, Topgun pays a $0.85 pershare dividend. At the end of one year you buy your Topgun shares (cover your shortsale) at $44 and are charged a commission of $20 and a 5 percent interest rate.a. What is your dollar return on the investment?b. What is your rate of return on the investment?

Answered: Image /qna-images/answer/73a2d4ba-9ac9-4f16-8bd8-e4bc41790e75.jpg

You decide to sell 100 shares of Topgun Enterprises Inc. short when it is selling a yearly high of $42.25. Your broker tells you that your margin requirement is 60 p and that the commission on the sale is $20. While you are short, Topgun pays a Se share dividend. At the end of one year you buy your Topgun shares (cover your s sale) at $44 and are charged a commission of $20 and a 5 percent interest rate. a. What is your dollar return on the investment? b. What is your rate of return on the investment?

You decide to sell 100 shares of Topgun Enterprises Inc. short when it is selling a yearly high of $42.25. Your broker tells you that your margin requirement is 60 p and that the commission on the sale is $20. While you are short, Topgun pays a Se share dividend. At the end of one year you buy your Topgun shares (cover your s sale) at $44 and are charged a commission of $20 and a 5 percent interest rate. a. What is your dollar return on the investment? b. What is your rate of return on the investment?

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

Problem 1PS

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