Question

After researching Best Buy common stock, Sally Jackson is convinced the stock is overpriced. She contacts her account executive and arranges to sell short 150 shares of Best Buy. At the time of the sale, a share of common stock had a value of $53. Three months later, Best Buy is selling for $55 a share, and Sally instructs her broker to cover her short transaction. Total commissions to buy and sell the stock were $82. What is her profit for this short transaction

Answer 1

Total profit after commission will be "$218".

Step-by-step explanation:

The given values are:

Share of common stock,

= $53

Total commissions to sell and buy,

= $82

Now,

The profit from buying and selling will be:

=
`55-53`

=
`2` ($)

Total profit will be:

=
`2* 150`

=
`300` ($)

hence,

The profit after reducing commission will be:

=
`300-82`

=
`218` ($)