You short-sell a stock and currently have 1/3 of the stock's value as collateral. Over the next 8 months, the stock that you shorted has a return of -23%. What is the EAR of your investment? The easiest way to do this one is to start with the multiplier, then apply it to the return on the asset to get the return on your equity, then annualize that return. The correct answer is: 1.20

You short-sell a stock and currently have 1/3 of the stock's value as collateral. Over the next 8 months, the stock that you shorted has a return of -23%. What is the EAR of your investment? The easiest way to do this one is to start with the multiplier, then apply it to the return on the asset to get the return on your equity, then annualize that return. The correct answer is: 1.20

Name: You short-sell a stock and currently have 1/3 of the stock's value as
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Description: You short-sell a stock and currently have 1/3 of the stock's value as collateral. Over the next 8 months, the stock that you shorted has a return of -23%. What is the EAR of your investment?The easiest way to do this one is to start with the multipli

Intermediate Financial Management (MindTap Course List)

13th Edition

ISBN:9781337395083

Author:Eugene F. Brigham, Phillip R. Daves

Publisher:Eugene F. Brigham, Phillip R. Daves

Chapter8: Basic Stock Valuation

Section: Chapter Questions

Problem 3P

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