Let us suppose that at t = 0, you had $5,000 of your own to invest andyou were bullish on the stock A. So at time t = 0, you borrowed anadditional $5, 000 from your broker at an interest rate 10% per year, and bought 100 shares of stock A. If the maintenance margin is 30%, wouldyou get a margin call until the time t = 2? If not, what would be your rateof return between t= 0 and t= 2?

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Stocks Po Qo P Q1 P2 Q2 A 100 $100m 90 $100m 80 $100m B 110 100 100 200 110 200 C 55 200 50 200 45 200 Stocks Po Qo P Q1 P2 Q2 A 100 $100m 90 $100m 80 $100m B 110 100 100 200 110 200 C 55 200 50 200 45 200