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IBM Short Selling Stock

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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Solution Summary

Attached Excel sheet works out the dollar return and gains limit of short selling 200 IBM shares.

$2.19