Final answer:
A stop-buy order price for short-selling 300 shares to limit the loss to $3,630 should be calculated by adding the maximum loss to the initial short-sell value and dividing by the number of shares. however the calculated price does not match any of the options provided, suggesting an error.
Step-by-step explanation:
When you short-sell 300 shares of Rock Creek Fly Fishing Co. at $36 per share and want to limit your loss to $3,630, you need to calculate the stop-buy order price that would trigger a buyback to prevent further losses. Given the short sale of 300 shares, to find the stop-buy order price per share, you add the maximum loss amount to the total initial value of the short-sold shares and then divide by the number of shares.
The maximum total value when the shares are bought back can be calculated as follows: initial value ($36 * 300 shares) = $10,800, plus the maximum loss ($3,630), which equals $14,430. Next, you divide this by the number of shares (300) to get the stop-buy price per share. This calculation gives you $14,430 / 300 = $48.10 per share. however, since this price is not available in the provided multiple-choice options, it suggests that there might be an error in the problem or in the calculation. Given that none of the choices match the calculated stop-buy price, I would suggest double-checking the question details and calculations before proceeding