BU111 Spring 2012 - Supplementary Questions

Schoolsoscom students offering support wilfrid

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Unformatted text preview: olsos.com Students Offering Support: Wilfrid Laurier University Selling Short Steps to Success: 1. Calculate proceeds from the short sale = #shares x (market price per share at the time of purchase) 2. Calculate the sale commission = 2% of the proceeds from the short sale 3. Calculate additional deposit in short account = 50% of the proceeds from the short sale1 4. Calculate total amount in short account = proceeds from the short sale + additional deposit 5. Calculate the cost of covering the short position = # shares x (market price per share at the time it is covered) 6. Calculate the purchase commission = 2% of the cost of covering the short the position 7. Calculate the capital gain (if this # is negative it is a capital loss) = proceeds from the short sale – sale commission - cost of covering the short position – purchase commission 8. Calculate the yield = capital gain ÷ additional deposit Problem 3 After disappointing sales of the Blackberry Playbook, you decide to sell short 12,500 shares of RIM...
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This note was uploaded on 02/07/2014 for the course BU 111 taught by Professor Jessicastockie during the Fall '08 term at Wilfred Laurier University .

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