An investor is willing to buy 340 stocks at $60 each and he has the option to borrow the maximum amount of money given an initial margin requirement of 50%. Show your work to answer the following requirements:

1. What would be investors equity position and return if the stock price decreases to $50 each.

2. If the maintenance margin is 25%, then to what extent the price would decrease before the investor receive a margin call from the broker.

3. How much would be the margin call if the price decreased to $35.

Short answers