Question: When giving numerical answers, please keep two decimal places for $ (such as prices), and three decimal places for percentage returns (such as ROE) in
When giving numerical answers, please keep two decimal places for $ (such as prices), and three decimal places for percentage returns (such as ROE) in the final answers. There are 26 questions including three long problems. Please budget your time accordingly. Question 24 6 pts The current market price of AWZ stock is $40 per share and you have $4000 of your own to invest. You borrow an additional $4000 from your broker and invest $8,000 in the stock. Assume the interest rate is 4% and maintenance margin is 30%. 1) What will be your rate of return if the price goes up by 8% after 6 months? 2) What is the minimum price before a margin call after a year? Please show your work
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