You deposit $300,000 cash in a brokerage account and short sell $500,000 of stocks on margin....

You deposit $300,000 cash in a brokerage account and short sell $500,000 of stocks on margin. Later the value of the stocks held short decreases to $469,000. What is your holding period return over this period?

Round your answer to 4 decimal places. For example, if your answer is 3.205%, then please write down 0.0321.

Solutions

Expert Solution

Holding period return = (Amount sold short - Amount now) / Cash account

Holding period return = ($500,000 - $469,000) / $300,000

Holding period return = 0.1033

jeff jeffy answered 2 years ago

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