An investor thinks that the share price of company ABC is going to increase in the

next few days. The current market price of ABC is $$60$ per share. The investor has

$$15,000$ of cash which he can use to invest in the stock. The investor also has the

possibility of borrowing an additional $$5,000$ from a broker to purchase the stock

on margin. If the share price of ABC increases to $$70$:

a$)$ What would be the profit or loss of the investor if he$/$she invests all his$/$her

cash in ABC?

b$)$ What would be the profit or loss of the investor if$,$ apart from the cash, he$/$she

also invests the borrowed $$5,000?$

c$)$ Compare your results between $($a$)$ and $($b$).$

d$)$ What are the assumptions that you took into account when arriving at results

$($a$)$ and $($b$)?$

e$)$ How would your results in $($a$),($b$)$ and $($c$)$ change if the share price of ABC

went down to $$50?$