60.1K

Verified Solution

Link Copied!

Please identify which answer goes with the correct corresponding label (a,b,c-1,etc). Also feel free to show the steps to reach the solution; I'd like to be able to further study this material! Thank you!

You believe the price of Freeze Frame Co. stock is going to fall, so you short 600 shares at a price of \\( \\$ 72 \\). The initial margin is 50 percent. Ignore dividends. a. Construct the equity balance sheet for the original trade. (Input all amounts as positive values.) b-1. Construct equity balance sheets for a stock price of \\( \\$ 63 \\) per share. (Input all amounts as positive values.) b-2. What is your margin? (Do not round intermediate calculations. Enter your answer as a percent rounded to 2 decimal places.) b-3. What is your effective annual return if you cover your short position at this price in five months? (Do not round intermediate calculations. Enter your answer as a percent rounded to 2 decimal places.) c-1. Construct equity balance sheet for a stock price of \\( \\$ 77 \\) per share. (Input all amounts as positive values.) c-3. What is your effective annual return if you cover your short position at this price in five months? (A negative value should be indicated by a minus sign. Do not round intermediate calculations. Enter your answer as a percent rounded to 2 decimal places.)

Answer & Explanation Solved by verified expert

See Answer