National Grid PLC. (ticker: NGG) is currently trading at $59.11 per share. But you are bearish on the stock and believe that the price will fall to $56.32 in two weeks. You decide to short sell 100 shares. Your broker will charge 1.7% interest for lending shares to you, independent of the length of the loan. You are required to pay the interest when you close your short sale position. What is your expected investment outcome? A. $132.00 profit B. $178.51 profit C. $196.25 profit D. $210.00 profit E. $379.49 profit
National Grid PLC. (ticker: NGG) is currently trading at $59.11 per share. But you are bearish on the stock and believe that the price will fall to $56.32 in two weeks. You decide to short sell 100 shares. Your broker will charge 1.7% interest for lending shares to you, independent of the length of the loan. You are required to pay the interest when you close your short sale position. What is your expected investment outcome? A. $132.00 profit B. $178.51 profit C. $196.25 profit D. $210.00 profit E. $379.49 profit
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
Problem 1PS
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Question
National Grid PLC. (ticker: NGG) is currently trading at $59.11 per share. But you
are bearish on the stock and believe that the price will fall to $56.32 in two weeks. You
decide to short sell 100 shares. Your broker will charge 1.7% interest for lending shares to
you, independent of the length of the loan. You are required to pay the interest when you
close your short sale position. What is your expected investment outcome?
A. $132.00 profit
B. $178.51 profit
C. $196.25 profit
D. $210.00 profit
E. $379.49 profit
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