Question

You decide to sell short 100 shares of Charlotte Horse Farms when it is selling at...

You decide to sell short 100 shares of Charlotte Horse Farms when it is selling at its yearly high of $53. Your broker tells you that your margin requirement is 55 percent and that the commission on the purchase is $150. While you are short the stock, Charlotte pays a $2.25 per share dividend. At the end of one year, you buy 100 shares of Charlotte at $42 to close out your position and are charged a commission of $140 and 12 percent interest on the money borrowed. What is your rate of return on the investment? Do not round intermediate calculations. Round your answer to two decimal places.

Business   Finance   
0 0
Add a commentTranscribed image text
Next >

Homework Answers

Answer #1

0 0
Know the answer?
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Log In

Sign Up

Not the answer you're looking for?
Ask your own homework help question
Similar Questions
You decide to sell short 100 shares of Charlotte Horse Farms when it is selling at...
You decide to sell short 100 shares of Charlotte Horse Farms when it is selling at its yearly high of $55. Your broker tells you that your margin requirement is 60 percent 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 one year, you buy 100 shares of Charlotte at $42 to close out your position and are charged a commission of $145...
You decide to sell short 300 shares of Charlotte Horse Farms when it is selling at...
You decide to sell short 300 shares of Charlotte Horse Farms when it is selling at its yearly high of $57. Your broker tells you that your margin requirement is 45 percent and that the commission on the purchase is $495. While you are short the stock, Charlotte pays a $2.30 per share dividend. At the end of one year, you buy 300 shares of Charlotte at $47 to close out your position and are charged a commission of $480...
You decide to sell 100 shares of Topgun Enterprises short when it is selling at a...
You decide to sell 100 shares of Topgun Enterprises short when it is selling at a yearly high of $42.25 .your broker tells you that you're in margin requirement at 60% and if the commission on the sale is $20. wow you are short topgun pays a $.85 per share dividend. at the end of one year you buy your topgun shares (cover youre short sale) at $44 and are charged a commission are $20 and a 5% interest rate...
You decide to sell 1,000 shares of Marston Industries short when it is selling at ¢35....
You decide to sell 1,000 shares of Marston Industries short when it is selling at ¢35. Your broker requires an initial margin deposit of 55 percent with no commission on the sale and a 6 percent interest rate on your margin loan. While you are short, Marston Industries pays a 75 pesewas per share dividend. At the end of one year you buy Marston Industries shares to cover your short sale at ¢30 and are charged a commission of ¢15....
16) You are bearish on Telecom and decide to sell short 100 shares at the current...
16) You are bearish on Telecom and decide to sell short 100 shares at the current market price of $45 per share. a. How much in cash or securities must you put into your brokerage account if the broker’s initial margin requirement is 50% of the value of the short position? b. How high can the price of the stock go before you get a margin call if the maintenance margin is 30% of the value of the short position?...
You are bearish on Telecom and decide to sell short 100 shares at the current market...
You are bearish on Telecom and decide to sell short 100 shares at the current market price of $45 per share. a. How much in cash or securities must you put into your brokerage account if the broker’s initial margin requirement is 50% of the value of the short position? b. How high can the price of the stock go before you get a margin call if the maintenance margin is 30% of the value of the short position? (Round...
You are bearish on IBM and decide to sell short 100 shares at the current market...
You are bearish on IBM and decide to sell short 100 shares at the current market price of $100 per share. The broker's initial margin requirement is 50% of the value of the short position. The maintenance margin is 20% of the value of the short position. How high can the price of the stock go before you get a margin call?
You are bearish on Telecom and decide to sell short 100 shares at the current market...
You are bearish on Telecom and decide to sell short 100 shares at the current market price of $41 per share. a. How much in cash or securities must you put into your brokerage account if the broker’s initial margin requirement is 50% of the value of the short position? b. How high can the price of the stock go before you get a margin call if the maintenance margin is 30% of the value of the short position?
You are bearish on BCE stock and decide to sell short 5,000 shares at the current...
You are bearish on BCE stock and decide to sell short 5,000 shares at the current market price of $100 per share. The initial margin requirement is 55%. Assume the minimum margin is 30%. At what price would you receive a margin call? a) 64.29 b) 136.59 c) 119.23
You are bearish on Telecom and decide to sell short 100 shares at the current market...
You are bearish on Telecom and decide to sell short 100 shares at the current market price of $50 per share. How much in cash or securities must you put into your brokerage account if the broker’s initial margin requirement is 50% of the value of the short position? If you earn no interest on the funds in your margin account, what will be the rate of return after 1 year if the stock is selling at (i) $60; (ii)...
ADVERTISEMENT
Need Online Homework Help?

Get Answers For Free
Most questions answered within 1 hours.

Ask a Question
ADVERTISEMENT