Question: You have a margin trading account with a 50% initial margin and a 35% maintenance margin. The interest rate on your loans is 8% per

You have a margin trading account with a 50% initial margin and a 35% maintenance margin. The interest rate on your loans is 8% per year.

1. You deposit $15,000 of your own money in the account. You will use all of it to buy on margin a stock trading at $50 per share.

a) Calculate the price at which you will receive a margin call

b) Calculate your ROI if after 3 months the share pays a dividend of $0.35 per share and is trading at $56.50 per share.

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