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At the beginning of the month, you sell short 200 shares of Wells Fargo that are...

At the beginning of the month, you sell short 200 shares of Wells Fargo that are currently selling at $45 per share. One month later you cover your short position at $52 per shares. During the month, Wells Fargo issued $2 dividend per share. What is you return during this month?

-0.200

0.200

-0.156

-0.111

0.111

Solutions

Expert Solution

The return will be calculated as

Return = (45 - 52 - 2)/45 = - 20%

Hence, option A is correct.

jeff jeffy answered 2 years ago
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