11 Company A and Company B are both banks offering similar services and their stocks...
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11 Company A and Company B are both banks offering similar services and their stocks are historically very positively correlated. A hedge fund manager decides to take a short position on Company A for $5 million and a long position on Company B for $5 million Use the information below to determine how much profit the manager will make from the trade, assuming it was initiated and closed in 150 days. Closed position Initiated Position $2.50 $2.00 Annual Stock Lending Fee 15bps Company A Company B $2.32 $2.15
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