**Answer:**

The rate of return will be of 20%

**Explanation:**

**These are the follwong steps to calculate the rate of return:**

**First you need to calculate the inflow of funds from short selling of Microsoft shares
**

The number of shares by the information reunited is 300

The selling price of each share is $ 30 per share.

Total sale proceeds is 300 shares×$ 30 per share** =$9000
**

**Secondly you need to calculate the margin requirement
**

Margin requirement on short sale 50 %

Total sale proceeds on short sale×50%**=$ 4500
**

Next year we will again buy each share at $ 27**
**

Total outflow of funds will be $ 27*300 shares **= $ 8100
**

**With the information calculated above, we are ready then to calculate the net equity after one year
**

Net equity will be= (9000+4500-8100)**= $5400
**

**Finally, we are ready to calculate the Rate of return**

If the net equity will be of $5400, the margin amount deposited is $ 4500, and net gain is $900, rate of return is as follows:

**Rate of return= (900/4500)×100= 20%**