Assignment

1. Suppose the call money rate s 4.5% and you pay s spread of 2.5% over that. you buy 800 shares of stock at $34 per share. you put up $15,000. f your broker requires a 30% maintenance margin. a) what price you will be subjected to margin call? b) one year later, the stock is selling for $48 per share, $34 and $29. construct an equity balance sheet for each price and the change in margin account. c) calculate your return on investment for each share price above

investment