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2. You are bullish on HMU stock. The current market price is $100 per share, and you have $1,800,000 of your own to invest. You
2. You are bullish on HMU stock. The current market price is $100 per share, and you have $1,800,000 of your own to invest. You borrow an additional $1,200,000 from your broker at an interest rate of 2% per week and invest $3,000,000 in the stock. HMU pays no dividends. The maintenance margin is 40%. a. Suppose the price of HMU stock falls immediately after your purchase. How low can the price of HMU stock fall before you receive a margin call? b. What is your rate of return if the price of HMU stock has gone up by 30% after a week? (8 marks)
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