Profit or loss on short investment


Assume that you open a 300-share short position in XYZ common stock at $30.19 with commission of 0.5%. When you close your position the stock price is $29.87 and you have to pay a commission rate of 0.5%. Calculate your profit or loss on this short investment (assume r = 0)?

(a) About $12.50 gain

(b) About $5.91 gain

(c) About $5.91 loss

(d) About $12.50 loss

(e) None of the above

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Finance Basics: Profit or loss on short investment
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