Problem on ibm stock selling


Question: Assume that IBM stock is selling for $110 per share and that you short sell 200 shares of the stock.

A) What would be your dollar return if the price of IBM stock drops to $95 per share?

B) What would be your dollar return if the price of IBM stock increases to $120 per share?

C) Is there a limit to your gains? Is there a limit to your losses? Explain.

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