USE THE INFORMATION BELOW FOR THE FOLLOWING PROBLEM(S)

Multiple Choice

USE THE INFORMATION BELOW FOR THE FOLLOWING PROBLEM(S)
You decide to sell short 200 shares of XCorp stock at a price of $75. Your margin deposit is 65 percent. Commission on the sale is 1.25 percent. While you are short, the stock pays a $1.75 per share dividend. Interest on margin debt is 5.25 percent per year.
-Refer to Exhibit 3.6. At the end of one year you close out your short position by purchasing share of XCorp at $45 per share. The commission is 1.25 percent. What is your rate of return on the investment?

A) -55.92 percent
B) 10.31 percent
C) 51.06 percent
D) 23.1 percent
E) -33.05 percent