Question $2$

a$.$ Describe a classic example of fund management activities in Saudi Arabia. What are different

types expenses that might affect your investment performance?

b$.$ You are a trader, expecting the market to decline, therefore you decided to short sell $100$

share of ABC company through a broker in the trading floor. Currently, the price of the share

is $$50..$ The initial margin is set for $50\%,$ while the maintenance margin is $40\%.$ If the price

goes down to $$60,$ will you receive margin call? Determine the price at which there will be a

margin call? If the share price goes up to $$55,$ what will be the rate of return?