1 Suppose that Intel is currently selling at $40 per share. You buy 250 shares by using $7,500 of your own money and borrowing the remainder of the purchase price from your broker. The rate on the margin loan is 4% per annum. What is the rate of return on your margined position if Intel is selling after one year at $34 ? 5 You sold short 500 shares of XYZ stock currently priced at $100. Your initial margin requirement was 50%. If interest rate is 0% and the stock is selling at $110, compute the ROE on your margined position. Ignore transactions costs. 3 Suppose that the following set of securities are available in the market: In absence of arbitrage, what must the value of the risk-free rate be