Problem 3-64 You decide to sell short 100 shares of Charlotte Horse Farms when it is selling at its yearly high of $61. Your broker tells you that your margin requirement is 50 percent and that the commission on the purchase is $190. While you are short the stock, Charlotte pays a $2.30 per share dividend. At the end of one year, you buy 100 shares of Charlotte at $48 to close out your position a charged a commission of $170 and 7 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. 15.32%

Problem 3-64 You decide to sell short 100 shares of Charlotte Horse Farms when it is selling at its yearly high of $61. Your broker tells you that your margin requirement is 50 percent and that the commission on the purchase is $190. While you are short the stock, Charlotte pays a $2.30 per share dividend. At the end of one year, you buy 100 shares of Charlotte at $48 to close out your position a charged a commission of $170 and 7 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. 15.32%

EBK CFIN

6th Edition

ISBN:9781337671743

Author:BESLEY

Publisher:BESLEY

Chapter5: The Cost Of Money (interest Rates)

Section: Chapter Questions

Problem 5PROB

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