Question

A sophisticated investor, B. Graham, sold 100 shares short of Amwell, Inc. at $54 a share. The price of the stock subsequently fell to $39 before rising to $56 at which time Graham covered the position (that is, closed the short position). What was the percentage gain or loss on this investment

Answer 1

-3.57%

Step-by-step explanation:

Calculation for What was the percentage gain or loss on this investment

Using this formula

Percentage of Gain/loss = [(Selling Price - Purchase Price) * Number of shares] / [Purchase Price * Number of shares]

Let plug in the formula

Percentage of Gain/loss = [($54 - $56) * 100] / [$56 * 100]

Percentage of Gain/loss = -$200 / $5,600

Percentage of Gain/loss = -3.57%

Therefore the percentage loss on this investment is -3.57%