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

question 90

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 rate of return on the investment?

• A) 10.48%
• B) 12.87%
• C) 13.98%
• D) 15.49%
• E) 18.87%

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Definitions:

Equality

The principle or state of having the same rights, status, and opportunities as others, without discrimination based on characteristics such as race, gender, or age.

Equity

The principle of fairness in dealings and distribution of resources within social, economic, and organizational contexts.

Collective Culture

Cultures that emphasize communal goals, shared values, and group solidarity over individual achievement.

Belongingness

A fundamental human need to form and maintain strong, stable interpersonal relationships and a sense of being an important part of a group or community.