Answer Happy

Question 12 You have been following the performance of JC Penney (JCP) for several years. If there is one central theme that you ahve observed is that the firm has consistently experienced declining sales, profits, and cash flows. From your research, their outlook for the foreseeable future is not bright. You make a decision to short JCP at $14 per share. The broker will charge you a $1 commission fee for this. By shorting, you are borrowing JCP stock from your broker and asking her to sell them for you with the promise to return the same number of stocks as were borrowed. If, at the time you need to return the stocks to the broker, JCP is sell ing at $11 per share, by what amount are you in-the-money (profit) or out-of-the-money (loss)? A B D In the Money @ $3.00 Out the Money @ $2.00 Out the Money @ $3.00 5 Points In the Money @ $2.00