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Juana short sold 100 shares of stock at a price of $24 a share. He used...

Juana short sold 100 shares of stock at a price of $24 a share. He used 60% margin to make the purchase. Juana bought the 100 shares of the stock after a year for $26 a share to close his position. Ignoring margin interest and trading costs, what is his return on his equity for this investment

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Answer #1

Return on Equity = (Selling Price - Buying Price)/Selling Price

= (100*24-100*26)/100*24

= -8.33%

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