BU111 Spring 2012 - Supplementary Questions

# Schoolsoscom students offering support wilfrid

This preview shows page 1. Sign up to view the full content.

This is the end of the preview. Sign up to access the rest of the document.

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...
View Full Document

## 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 .

Ask a homework question - tutors are online