Suppose you are bearish on a stock, and its market price is $250 per share....
60.1K
Verified Solution
Link Copied!
Question
Finance
Suppose you are bearish on a stock, and its market price is $250 per share. You tell your broker to sell short 1,000 shares. The broker borrows 1,000 shares either from another customer's account or from another broker. Suppose also that the broker has a 50% margin requirement on short sales. Suppose that the price of the stock increases to $275 per share when you close your short position. How many percent is your rate of return before fees?
Answer & Explanation
Solved by verified expert
Get Answers to Unlimited Questions
Join us to gain access to millions of questions and expert answers. Enjoy exclusive benefits tailored just for you!
Membership Benefits:
Unlimited Question Access with detailed Answers
Zin AI - 3 Million Words
10 Dall-E 3 Images
20 Plot Generations
Conversation with Dialogue Memory
No Ads, Ever!
Access to Our Best AI Platform: Flex AI - Your personal assistant for all your inquiries!
