Question: Assume that IBM stock is selling for $110 per share and that you short sell 200 shares of the stock.
Q1. What would be your dollar return if the price of IBM stock drops to $95 per share?
Q2. What would be your dollar return if the price of IBM stock increases to $120 per share?
Q3. Is there a limit to your gains? Is there a limit to your losses? Explain.