Problem 3-04You 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 requirementis 65 percent and that the commission on the purchase is $380. While you are short the stock, Charlotte pays a $2.85 per share dividend. At the end ofone year, you buy 200 shares of Charlotte at $37 to close out your position and are charged a commission of $365 and 10 percent interest on the moneyborrowed. What is your rate of return on the investment? Do not round Intermediate calculations. Round your answer to two decimal places.%

Name: Problem 3-04You decide to sell short 200 shares of Charlotte Horse Fa
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Description: Problem 3-04You 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 requirementis 65 percent and that the commission on the purchase is $380. While you are sho

Cost of 200 shares at $51 = 200*51 = $10200Margin = 0.65*10200 = $6630Borrowed from broker =…

Answered: to close out your position and are…

Business

Finance

to close out your position and are charged a commission of $365 1. What is your rate of return on the investment? Do not round intermediate calculations. Round your answ

CONCEPTS IN FED.TAX.,2020-W/ACCESS

20th Edition

ISBN:9780357110362

Author:Murphy

Publisher:Murphy

Chapter11: Property Dispositions

Section: Chapter Questions

Problem 93DC

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