### Short-term treasury securities

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1. You sell short 200 shares of Apple at \$100 per share. In addition to the money from the short sale, you place \$10,000 of your own money in your brokerage account and no money in your account earns interest. If Apple share price rises 10%, and you buy back the 200 borrowed shares, the return on your \$10,000 investment is -20%. You lose \$2,000 in Apple and you invested \$10,000

2. You sell short 200 shares of Apple at \$100 per share. In addition to the money from the short sale, you place \$10,000 of your own money in your brokerage account and no money in your account earns interest. If Apple share price falls 10%, and you buy back the 200 borrowed shares, the return on your \$10,000 investment is 20%. You make \$2,000 on Apple and you invested \$10,000.

3. You short \$50,000 worth of Apple stock and buy \$50,000 worth of Microsoft stock. You place \$25,000 of your own money into your account as margin and this money is invested in short-term Treasury securities earning 6% annually. One year later, Microsoft is down 8% and Apple is down 10%. You sell your Microsoft shares and buy back Apple shares to cover your short position. Your percentage return on your own money is 10%. You make \$1,000 on long/short position + 6% on T-Bills.

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