Solution-Introduction to the concept of short-selling

Introduction to the concept of short-selling

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Devise a trading strategy that, based on the information above, would allow you to lock in a riskless pro?t. Explain in what sense the strategy is riskless. (50 words or less, 10 pts)

Hint: here you are going to take a long position in a ?rm, and a short position in another. This strategy involves a practice called "short-selling". See the "short-sales" subsection of Berk and DeMarzo , page 409 for an introduction to the concept of short-selling.

Reference no: EM133071926

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Introduction to the concept of short-selling

Reference no: EM133071926

Reference no: EM133071926

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