Question: PLEASE ANSWER C AND BELOW ONLY Suppose that you sell short 400 shares of Xtel, currently selling for $55 per share, and give your broker


PLEASE ANSWER C AND BELOW ONLY
Suppose that you sell short 400 shares of Xtel, currently selling for $55 per share, and give your broker $15,000 to establish your margin account a. If you earn no Interest on the funds in your margin account, what will be your rate of return after one year if Xtel stock is selling at: (0) $60 (11) $55; (1) $50? Assume that Xtel pays no dividends. (Leave no cells blank - be certain to enter "o" wherever required. Negative values should be Indicated by a minus sign. Round your answers to 2 decimal places.) Answer is complete and correct. i. (13.33) % ii. Rate of return Rate of return Rate of return 0 % iii. 13.33 % b. If the maintenance margin is 25%, how high can Xtel's price rise before you get a margin call? (Round your answer to 2 decimal places.) Answer is complete and correct. Margin call will be made at price IS 74.00 or higher c. Redo parts (a) and (b), but now assume that Xtel also has paid a year-end dividend of $2 per share. The prices in part (a) should be Interpreted as ex-dividend, that is, prices after the dividend has been paid. (Negative values should be indicated by a minus sign. Round your answers to 2 decimal places.) Answer is complete but not entirely correct. i. Rate of return Rate of return Rate of return 16.00 X % (2.67) % % 10.67 X % Answer is complete but not entirely correct. Margin call will be made at price 73.20 X or higher
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