What is the value of assets and equity

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On January 1, you sold short 100 shares ofXYZ stock at $20 using a 50% initialmargin. The interest rate on the margin account is 10% annually. On April 1 (inthree-months), you covered the short sales by buying stock at a price of $15 pershare. You paid 50 cents per share in commissions for each transaction. Assumeyou received interest on all your assets, i.e. the sum of the short sale proceeds andthe margin.

a.What is the value of your assets and equity on April 1?

b.What is the total rate of return on equity?

Reference no: EM132635047

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