Instructions: $(1)$ Do not show the calculation process. Provide your final answers only. $(2)$ Use four decimal places for your calculations. Show your answers by rounding the calculation results to two decimal places if the answers are in dollars. For example, if your calculation results in $$100\mathrm{.}1265,$ show your answer as $$100\mathrm{.}13.$ If you need to show your answers as a percent, take four decimal places from your calculation and convert them into a percent. For example, if your calculation results in $0\mathrm{.}4567,$ show $45\mathrm{.}67\%,$ not $45\mathrm{.}7\%$ or $46\%.$ To set your Texas Instrument BA II PLUS calculator at $4$ decimal places, press $[2$ND$]$ FORMAT $4[$ENTER$].$ Please follow the instructions for homework assignments on the syllabus.

You open a brokerage account with Western Securities and purchases $200$ shares of ABC Company at $$60$ per share on the first business day of the year. You borrow $30$ percent of the purchase amount from your broker to help pay for the investment.

What is the initial dollar margin?

What is the initial percentage margin?

If the maintenance margin is $30\%,$ how far could the stock price fall before you would get a margin call? Assume the price fall happens immediately.

Assuming an interest rate on the margin loan of $5\%$ per year, what will be your rate of return $($ignoring dividends and taxes$)$ if the stock goes up by $20\%$ by year$$s end?

Assuming an interest rate on the margin loan of $5\%$ per year, what will be your rate of return $($ignoring dividends and taxes$)$ if the stock goes down by $2$You are pessimistic on CBA stock $($current market price $=$ $$40$ per share$)$ and you order your broker to sell short $2,000$ shares. The broker requires you to post an initial margin of $50\%$ and a maintenance margin of $30\%$ on short sales. CBA has paid a dividend of $$1$ per share before you covered the short position.

What is the initial margin deposit in Dollars?

What is the asset balance on your account immediately following the short sale?

How high can CBA$$s price rise before you get a margin call?

What would be your rate of return after one year if you repurchase the stock at $$50$ per share? Assume the repurchase price is an ex$-$dividend price.

What would be your rate of return after one year if you repurchase the stock at $$30$ per share? Assume the repurchase price is an ex$-$dividend price.