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1. You are bullish on IT stock. The current market price is OMR70 per share, and you have OMR8,000 of your own to invest. You

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1. You are bullish on IT stock. The current market price is OMR70 per share, and you have OMR8,000 of your own to invest. You borrow an additional OMR7,000 from your broker at an interest rate of 7% per year and invest OMR15,000 in the stock. (a) What will be your rate of return if the price of Telecom stock goes up by 15% during the next year? The stock currently pays no dividends. (b) How far does the price of Telecom stock have to fall for you to get a margin call if the maintenance margin is 30%? Assume the price fall happens immediately

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