Exhibit 4.6 USE THE INFORMATION BELOW FOR THE FOLLOWING PROBLEM(S)

question 54

Multiple Choice

Exhibit 4.6
USE THE INFORMATION BELOW FOR THE FOLLOWING PROBLEM(S)

You decide to sell short 200 shares of XCorp stock at a price of $75. Your margin deposit is 65 percent. Commission on the sale is 1.25%. While you are short, the stock pays a $1.75 per share dividend. Interest on margin debt is 5.25% per year.
-Refer to Exhibit 4.6.Suppose at the end of one year XCorp is selling at $90 per share and you cover your short position at this price.What is your rate of return on the investment? (Assume a 1.25% commission on the purchase.)

• A) -40.64%
• B) -25.53%
• C) 5.21%
• D) 72.7%
• E) -71.2%

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Definitions:

Just-in-time

An inventory management system where materials or products are produced or acquired only as needed for use, reducing inventory costs.

Customer Demand

The desire and willingness of consumers to purchase goods or services at a particular price and time.

Distribution Center Design

The planning and layout of a facility used for the storage, handling, and distribution of goods to ensure efficient and effective supply chain operations.

Just-in-time (JIT)

A production and inventory strategy that manufactures or acquires goods only as needed for immediate use, reducing waste and improving efficiency.