1 - An investor buys $8,000 worth of a stock priced at $40 per share using 50% initial margin. The broker charges 6% on the margin loan and requires a 30% maintenance margin. In one year the investor gets a margin call. What is the price the stock at the time of the margin call? 2- An investor sells short 500 shares of stock at $15 per share. The initial margin requirement is 60%. The investor earns no interest on funds in the margin account and no dividends are paid. a- How high can the price of the stock go before you get a margin call if the maintenance margin is 30% ? b- What is the investor's rate of return if the short sale is covered at $12 per share? 3- An investor buys 100 shares of Sears at $45 per share on margin with an initial margin of 70 percent and a maintenance margin of 25% percent. In two months, the stock goes to $56. What is the actual margin of the stock when it's at $56? 4- Consider two perfectly negatively correlated risky securities A and B. A has an expected rate of return of 12% and a standard deviation of 17%. B has an expected rate of return of 9% and a standard deviation of 14%. Calculate the weight of security B in the minimum variance portfolio. 5- The return on the risky portfolio is 15%. The risk-free rate is 10%. The standard deviation of return on the risky portfolio is 20%. If the standard deviation on the complete portfolio is 15%, what is the expected return on the complete portfolio? 6- Describe a cognitive error and an emotional bias that you might be prone to. Discuss their adverse effects on your investment decisions. What remedial actions you can take to mitigate these biases