Exhibit 4.4 Use the Information Below for the Following Problem(S)

question 90

Multiple Choice

Exhibit 4.4
Use the Information Below for the Following Problem(S)
You decide to sell 100 shares of Davis Industries short when it is selling at its yearly high of $35. Your broker tells you that your margin requirement is 55 percent and that the commission on the sale is $15. While you are short, Davis pays a $0.75 per share dividend. At the end of one year you buy your Davis shares (cover your short sale) at $30 and are charged a commission of $15 and a 6 percent interest rate.
-Refer to Exhibit 4.4.What is your rate of return on the investment?

• A) 10.48%
• B) 12.87%
• C) 13.98%
• D) 15.49%
• E) 18.87%

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Definitions:

Stable

Referring to something that is not likely to change or move; in psychology, it may refer to consistent personality traits or conditions.

Internal Attributions

The process of attributing the cause of one's own or another's behavior to internal, personal characteristics rather than to external factors.

External Attributions

The process of assigning the cause of behavior to some situation or event outside a person's control rather than to some internal characteristic.

Entity Theorists

Individuals who believe that personal attributes, such as intelligence or personality, are fixed and cannot be changed.