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You decide to sell short 200 shares of Charlotte Horse Farms when it is selling at...

You decide to sell short 200 shares of Charlotte Horse Farms when it is selling at its yearly high of $51. Your broker tells you that your margin requirement is 65 percent and that the commission on the purchase is $330. While you are short the stock, Charlotte pays a $2.35 per share dividend. At the end of one year, you buy 200 shares of Charlotte at $36 to close out your position and are charged a commission of $320 and 14 percent interest on the money borrowed. What is your rate of return on the investment? Do not round intermediate calculations. Round your answer to two decimal places.

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20.82%

jeff jeffy answered 2 years ago
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