5. Margin (31 points): I have $40,000 + I borrow $30,000 to buy shares of Fitbit, selling at $100 today.

a. (3 points) How many shares can I buy? n = _________

b. (6 points) Suppose Fitbit goes to $200 after one year. There are no dividends. What is my total return with this margin account ($40,000+borrowed $30,000) and without this margin account ($40,000)?

With margin account: return =__________.

Without margin account: return =__________.

c. (5 points) If the maintenance margin is 30%, what is the critical price at which I would get a margin call? P = _______

d. (9 points) Following previous question, what can you do after margin call is received if initial margin requirement is 50%? Show me all of solutions.

e. (4 points) Suppose I have to pay 5% interest (for the holding period) on money I borrowed, what is the critical price at which I would get a margin call? P = _______.

f. (4 points) Suppose I have $40,000 to invest, how many shares of Fitbit I can buy at most if the initial margin requirement is 50%.