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Tue 8 Apr, 2014 09:36 pm
Person A shorts a stock at the initial price of $200 and puts down $60 for collateral. The spot price at expiration is $222. The annual interest rate is 4%. What is the total profit at expiration, assuming that the short is settled at expiration?
@kmzzz,
I'm not helping you with your homework
@glitterbag,
I do not understand the concept behind whether or not the collateral on the stock gains interest, and thought it would be easier to understand with an example...
@kmzzz,
That question word for word is from sample broker's exam, right?
@bobsal u1553115,
You don't have to solve the problem for me, just please help explain the reasoning behind why I would do it. It's also not word for word, there was a lot more to the problem that I understand so I didn't include
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