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:

Globalization

The process by which businesses or other organizations develop international influence or start operating on an international scale, leading to increased interconnectedness.

Culture Change

The phenomenon by which cultural elements such as norms, values, traditions, and languages evolve over time due to factors like innovation, diffusion, and acculturation.

Majority Ethnic Group

The ethnic group in a given society or country that makes up the largest percentage of the population, often holding significant cultural, economic, or political influence.

Han

The majority ethnic group of China, constituting over 90% of its population.