An investor, sold 400 shares short of XYZl, Inc. at $42 a share. The price of...
An investor, sold 400 shares short of XYZl, Inc. at $42 a share. The price of the stock subsequently fell to $38 before rising to $50 at which time investor covered the position (that is, closed the short position). What was the percentage gain or loss on this investment?
Homework Answers
Given that,
An investor, sold 400 shares short of XYZl, Inc. at $42 a share
Than he covered the position at when stock fall to $38
So, total profit from short sell is
Profit = (selling price - buying price) = (42 - 38) = $4
So, percentage gain = profit/selling price = 4/42 = 9.52%
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