FNCE 3303 Spring 2021 Problem set 1 Problem 1 Considering the following order book for a share of stock: Bid Ask Price Shares Price Shares 20 10 21 15 19 20 22 10 18 5 23 20 17 30 5 a. [2pts) How much does it cost to place a market buy order for 19 shares ? b. [2pts) How much can we get to place a limit sell order for 17 shares at $17.5? 21 Problem 2 Assume you sold short 20 shares of common stock at $50. The initial margin is 50%. a. [2pts) What would be the new margin if stock price increases to $55 per share? b. (2pts) Whunt stock price would you receive a margin call if the maintenance margin is 30%? c. [2pts) What would be the maintenance margin if a margin call is nude at a stock price of $60? d. 1pt) A year later, the stock price has declined to $10. What is the rate of return on the investment i the stock las id dividend of S1 per shure? (Stock borrowers must return the paid divided to the stock lenders)