8. A simple example of short positions Suppose that an investor seeks to take a short position on the stock of company XYZ and that the price of XYZ is currently $100. An investor would take a short position if they believe that the price of the stock will . Suppose that an investor has taken a short position on 100 shares of XYZ (price=$100 per share). If the price of XYZ falls to $70 per share, the investor will experience a of .(Hint: Ignore the interest costs of the loan.)
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Step 1: An investor would take a short position if they believe that the price of the stock will **decrease**. Show more…
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