USE THE INFORMATION BELOW FOR THE FOLLOWING PROBLEM(S)

question 41

Multiple Choice

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 3.4. 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:

Financial Services

Economic services provided by the finance industry, including banks, insurance companies, investment funds, and more.

Traditional Banking

Banking services provided by physical bank branches, including deposit taking, lending, and other financial services.

Definitive Stakeholder

A key individual or group with a significant interest in or influence over the outcome of a project or business endeavor.

Dominant Stakeholders

Key individuals or groups who have a significant influence or control over an organization's strategies and outcomes.