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4. You are bullish on EMU stock. The current market price is $80 per share, and you have $400,000 of your own to invest. You

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4. You are bullish on EMU stock. The current market price is $80 per share, and you have $400,000 of your own to invest. You borrow an additional $200,000 from your broker at an interest rate of 2% per week and invest $600,000 in the stock. EMU pays no dividends. a. Suppose the price of EMU stock falls immediately after your purchase. The maintenance margin is 40%. How low can the price of EMU stock fall before you receive a margin call? b. Suppose a week has passed. What is your rate of return if the price of EMU stock has gone up by 15%? (10 marks) Show transcribed image text

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