1) Suppose you expect SugarCane's stock price to decline. So you decide to ask your broker to short 2,000 shares. The current market price is $40. Proceeds from the $80,000 short sale are credited to your account. However, a few days later, the market price of the stock rises to $80 per share, and your broker asks you to close your position immediately. What is your profit or loss from this transaction?

2) An investor has an initial margin requirement of 50% on his margin account and a maintenance margin requirement of 25%. The investor shorted 1,000 shares at $40 per share. What is the highest price the stock can reach in the market before the investor receives a margin call?