Dennis sells short 100 shares of ARC stock at $152 per share on January 15, 2020. He buys 200 shares of ARC stock on April 1, 2020, at $190 per share. On May 2, 2020, he closes the short sale by delivering 100 of the shares purchased on April 1 a. What are the amount and nature of Dennis’s loss upon closing the short sale?
b. When does the holding period for the remaining 100 shares begin?
c. If Dennis sells (at $27 per share) the remaining 100 shares on January 20, 2017, what will be the nature of his gain or loss?

See explanation

Explanation:

a. What are the amount and nature of Dennis’s loss upon closing the short sale?

Sales consideration = $100 × $152 = $15200

Less: Closing Value of Short sales = 100 × $190 = $19000

Short term capital loss = $3800

b. When does the holding period for the remaining 100 shares begin?

The holding period for the remaining 100 shares begin on May 2, 2020, which was when the short sale was closed.

c. If Dennis sells (at $27 per share) the remaining 100 shares on January 20, 2017, what will be the nature of his gain or loss?

Sales consideration = 100 × $27 = $2700

Less: Base value = $19000

Short term capital loss = $16300

odd consecutive integers are odd integers that follow each other. they have a difference of 2 between every two numbers. if n is an odd integer, then n, n+2, n+4 and n+6 will be odd consecutive integers. the first number in the pattern is always the variable on its own or in this case, "n". examples.

answerboth the short run phillips curve and the aggregate demand and aggregate supply model