Question: kindly answer all the questions please, if not please dont take the question thanks! 1.You borrow $20,000 and buy 1000 shares of Facebook at $50

kindly answer all the questions please, if not please dont take the question thanks!

1.You borrow $20,000 and buy 1000 shares of Facebook at $50 per share on margin. The interest on the loan is 10%. One year from now the price is $53. Assume no dividends are paid. What is your final margin?

49.5%

52.5%

55%

58.5%

None of the above

2. An investor invests 50% of her wealth in the market portfolio with an expected rate of return of 12% and a standard deviation of 20%, and she puts the rest in Treasury bills that pay 2% per year. What is the variance of the portfolio?

0.01

0.04

0.1

0.2

None of the above

3.

You short-sell 10 shares of Amazon.com, Inc today with a 40% margin. The stock price is $2,000 per share. What is your maximum rate of return for this trade when you cover your position in the future (ignoring transactions costs)?

40%

60%

200%

250%

Unlimited

4.

  1. On Jan 1, you sold short 500 shares of Tencent at $60 per share. You post $12,000 to the margin account. On April 1, you received a margin call on this trade. Assume the minimum margin requirement is 30%, what is the price of the stock that triggered the margin call?

    $58.26

    $60.97

    $61.35

    $64.62

    None of the above

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