Cash for the transaction above short proceeds

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Reference no: EM131957958

Assume that you sell short 350 shares of a stock when the market price is 32.10–32.15. Your broker demands a 20% haircut for collateral and pays a short rebate of 3%. You borrow all needed cash for the transaction above the short proceeds at an interest rate of 4.8%. One year later, the price is 29.50– 29.55, and you close the position. What is the net profit (in $)?

Reference no: EM131957958

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