$(30$ pts$)$ You had a margin account with $$5,000$ equity. Together with the $$5,000$ you

borrowed from your broker, you purchased $100$ shares of IBM stocks at $$100$ per share

a$.(5$ pts$)$ What is the initial margin of your account?

A$.30\%$

B$.50\%$

C$.70\%$

D$.90\%$

b$.(5$ pts$)$ One year later $($today$),$ the IBM stock price falls to $$60$ per share. Assume

margin interest rate is $9\%$ per year. What is the current margin of your account?

A$.83\mathrm{.}33\%$

B$.55\mathrm{.}05\%$

C$.25\mathrm{.}67\%$

D$.9\mathrm{.}17\%$

c$.(10$ pts$)$ Assume $35\%$ maintenance margin. If you do not want to liquidate your stocks,

how much money do you need to deposit to maintain the margin requirement? Assume

your new deposit is used to pay down the liability in the margin account.

d$.(10$ pts$)$ If you do not have extra money, so that you have to sell your IBM stocks. At

least how many stocks do you need to sell to maintain the margin requirement? Ignore

any transaction costs, such as bid ask spread.