Last week, Seward Company stock was selling at $66 a share when Ryan sold 300 shares of the stock short.Today Ryan bought 300 shares of the same stock at a price of $70.00 share to cover his position.Ignoring trading costs, what is the dollar return on Ryan's investment?

Question

Quizplus · Accepted Answer

Ryan sold the shares short at $66 each, receiving $19,800 (300 shares x $66). He then bought them back at $70 each, costing him $21,000 (300 shares x $70). The dollar return is the difference: $19,800 - $21,000 = -$1,200.

Last Week, Seward Company Stock Was Selling at $66 a Share