posted by .

You decide to sell short 100 shares of Charlotte Farms when it is selling at its yearly high of $56. Your broker tells you that your margin requirement is 45% and that the commission on the purchase is $155. While you are short the stock, Charlotte pays a $2.50 per share dividend. At the end of 1 year, you buy 100 shares of Charlotte at $45 to close out your position and are charged a commission of $145 and 8% interest on the money borrowed. What is your rate of return on the investment?

  • Finance -

    i dont know

Respond to this Question

First Name
School Subject
Your Answer

Similar Questions

  1. Finance

    Suppose that you sell short 100 shares, now selling at $70 per share. What is your maximum possible loss?
  2. Finance

    Suppose you short-sell 100 shares of a stock at $55 with a commission charge of 0.5%. You also payu commission charge for purchasing the stock to cover the short-sale. What is your profit if you close the short-sale at $54?
  3. Personal Income Tax

    Here is my homework problem that I need some help with: "A taxpayer is considering selling 100 shares of stock. The current market price is $7,500. Which shares should the taxpayer instruct the broker to sell, and what are the tax …
  4. math

    suppose walmart stock is selling at $59 a share and mattel stock is selling at $28 a share. Amy waller has a maximum of $6000 to invest. she wishes to purchase four times as many shares of walmart as of mattel. only whole shares of …
  5. Algebra 2

    Tracey is contemplating the purchase of 100 shares of a stock selling for 15 per share. The stock pays no dividends. Her broker says that the stock will be worth 20 per share in 2 years. What is the annual rate of return on this investment?
  6. Finance

    A U.S. firm wants to raise $15 million by selling 1 million shares at a net price of $15. We know that some say that firms "leave money on the table" because of the phenomonon of underpricing. Using the average amount of underpricing …
  7. finance

    11-10. A U.S. firm wants to raise $15 million by selling 1 million shares at a net price of $15. We know that some say that firms “leave money on the table” because of the phenomenon of underpricing. a. Using the average amount …
  8. Stocks

    An investor purchased 700 shares of stock at $54.03 per share. She later sold them for $53.62. The broker's commission was 3% of the purchase price and 1% of the selling price. What is the amount the investor lost on the stock?
  9. maths

    by selling at 77% some 9/4%shares of face value 100 and investing the proceeds in 6% shares of face value 100, selling at 110 a person got profit of 117. how many shares did he sell?
  10. finance

    teresa buys 100 shares of XYZ sock on margin at $20 per share. If the margin requirement is 45 percent, the interest rate is 10 percent, and she holds the security for 1 year, how much interest must she pay?

More Similar Questions