3. You short sell 1000 shares of Dot Bomb stock, which has a market price of $100 per share. The broker has a margin requirement of 50%. (10 points) a. Suppose that Dot Bomb falls to $70 per share, what is your rate of return b. Suppose that the maintenance margin is 30%. How much can the price of the stock rise before you get a margin call?

4. Suppose you buy 100 shares of Pinterest, which are selling for $50, borrowing 25% of the necessary funds from your broker. You pay an interest rate of 8% on margin loans. (10 points) a. If the stock price falls to $40, what will your rate of return be b. If the maintenance margin is 60%. How much can the price of the stock fall before you get a margin call?