Suppose you have $10,000 in cash to invest.You decide to sell short $5000 worth of Kinston stock and invest the proceeds from your short sale plus your $10,000 into one-year Treasury bills earning 5%.At the end of the year,you decide to liquidate your portfolio.Kinston Industries has the following realized returns:
The return on your portfolio is closest to:
A) -0.5%
B) 13.5%
C) -2.5%
D) 14.5%
E) 5.0%
Correct Answer:
Verified
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