$1.$ Please read STC chapters $6-10$ and complete STC progress exam $2$A$.$

$2.$ You see the following information regarding the market depth for Cisco shares from NASDAQs

Level II system $($remember that the volume is quoted in hundreds of shares$).$

Cisco Market

Bid Price Volume Ask Price Volume

$20\mathrm{.}241020\mathrm{.}2820$

$20\mathrm{.}23120\mathrm{.}3110$

$20\mathrm{.}213020\mathrm{.}315$

$20\mathrm{.}204020\mathrm{.}3510$

a$)$ If you place a market order to buy $100$ shares, how much would you pay for the $100$ shares?

b$)$ If you place a market order to buy $2500$ shares, how much would you pay for the $2500$ shares?

c$)$ If you place a market order to sell $100$ shares, how much would you receive for $100$ shares?

d$)$ If you place a market order to sell $2500$ shares, how much would you receive for $2500$ shares?

$3.$ Becky Bigshot opens a brokerage account with $$100,000$ in cash. Beth buys $5000$ shares of

Sensational Superconductors at $$40$ per share. Beth borrows the additional $$100,000$ from her broker

to help pay for the purchase. The interest rate on the loan is $8\%$ per year. The broker requires a $30\%$

maintenance margin.

a$.$ What is the margin in Beckys account when she first purchases the stock?

b$.$ If the share price increases by $25\%$ up to $$50$ in one year, how much will Beckys equity be

worth? What rate of return will Becky make on the investment?

c$.$ If the share price does not change in one year, how much will Beckys equity be worth? What

rate of return will Becky make on the investment?

d$.$ If the share price falls by $20\%$ down to $$32$ in one year, how much will Beckys equity be

worth? What rate of return will Becky make on the investment?

e$.$ Ignoring the interest on the investment, at what price would Becky receive a margin call if the

stock moves immediately after putting on the position?

f$.$ At what price would Becky receive a margin call in one year if the stock price moves after

accounting for the interest paid on the loan?

$4.$ Pat Plummets opens an account to sell short Crazy Cryptocurrency Exchange $($CCE$).$ Pat Plummets

then shorts $2000$ shares of CCE at a price per share of $$80.$ The initial margin requirement is $50\%.$ The

broker charges a borrowing fee of $5\%$ per year on the initial value of securities borrowed. No interest

is earned on the deposits in the account. The broker requires a $30\%$ maintenance margin.

a$.$ How much does Pat Plummets need to deposit in the account initially?

b$.$ If in one years time, CCEs stock price has increased to $$110$ and paid a dividend of $$1\mathrm{.}50$

per share. What is the remaining margin in the account? If Pat closes the position, what rate

of return will Pat receive?

c$.$ If in one years time, CCEs stock price has decreased to $$50$ and paid a dividend of $$1\mathrm{.}50$ per

share. What is the remaining margin in the account? If Pat closes the position, what rate of

return will Pat receive?

d$.$ At what price will Pat receive a margin call if the stock price moves immediately after putting

on the position?

e$.$ At what price will Pat receive a margin call if the stock price moves in one year after the

interest and dividend?

f$.$ When CCEs stock actually falls to $$2$ in one years time after having paid a dividend of

$$1\mathrm{.}50$ per share, what rate of return will Pat receive?