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

question 57

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 dollar return on the investment?

• A) $130.50
• B) $300.50
• C) $100.00
• D) $1,773.75
• E) $3,500.00

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Definitions:

Informal Authority

Influence and power within an organization that stems from personal attributes or relationships, rather than formal position.

Social Position

The standing or rank of a person or group within the social hierarchy of a society.

Authority

The ability or prerogative to direct, decide, and demand adherence.

Power

The ability to influence or control the behavior of people or the course of events.