USE THE INFORMATION BELOW FOR THE FOLLOWING PROBLEM(S)

question 78

Multiple Choice

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 percent. While you are short, the stock pays a $1.75 per share dividend. Interest on margin debt is 5.25 percent per year.
-Refer to Exhibit 3.6. 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 percent commission on the purchase.)

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

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Definitions:

Physical Environment

The tangible surroundings in which individuals live, work, or play, influencing their behavior and well-being.

Systems Theories

A conceptual framework focusing on the interrelationships and interdependence of various parts within a whole, emphasizing their connections and influences on each other.

Limitations

Restrictions or constraints that limit or define the scope, ability, or extent to which something can be done or achieved.

Micro

A prefix or term referring to small-scale or detailed aspects of a subject, often used in scientific and social sciences contexts.