abc company's stock is currently selling at $100 per share. you have 12000 in your pocket but want to buy 200 shares. you can borrow the remainder of the purchase price from your broker at an annual rate of 5% the margin loan.

a. What happens to your net worth(i.e.return) in your brokerage account if the price of abc company increases to $100 after one year?

b.If the maintenance margin is 30%, how low can abc's price drop in one year before you get a margin call?

c.Explain why you may want to buy on margin.Is there any disadvantage of this strategy?