(a) You purchased 1,000 shares of ABC common stock on margin at $45 per share. Assume the stock pays no dividend and no interest on margin is charged. 1) If the initial margin is 45%, what would the maintenance margin be if a margin call is made at a stock price of $30? (5 marks) ii) What would be your rate of return if you sell the stock at $35 per share? (3 marks) (b) The total risk of Portfolios A, B and Care 49%, 64% and 100% respectively. The market price of risk is 8%. The Market Portfolio has an expected return and a total risk of 11% and 100% respectively. You want to form another Portfolio H by investing $7,000 in Portfolio A and $3,000 in Portfolio B. i) What is the standard deviation of Portfolio H if the correlation coefficient between Portfolio A and Portfolio B is: 1) perfectly positively correlated 2) uncorrelated (6 marks) ii) If the expected return of Portfolio C is 9.4% and it is lying on the Securities Market Line, compute the beta of Portfolio C. (3 marks) iii) Is Portfolio C a Market Portfolio as it has same level of total risk (i.e. 100%) as the Market Portfolio? Explain. (2 marks) iv) You want to borrow $7,000 at the risk-free rate. Combined with your personal savings of $10,000, you will invest all these monies in the Market Portfolio. Compute your portfolio expected return and standard deviation. (6 marks)