Assume that Vogl stock is priced at $$250$ per share. An investor purchases the stock on margin, paying $$150$ per share and borrowing $$100$ from the brokerage firm at $10\%$ annualized interest rate. One year from now, the investor sells the shares for $$215.$ Calculate the investor's return from holding the stock. Is this return higher or lower than it would have been if the investor had not traded on margin? Explain.

Suppose the investor in the previous part was subjected to a margin call. How would the investor satisfy the margin call?

Assume that Vogl stock is priced at $$250$ per share. An investor sells the stock short. One year from now, the investor closes the short position when the stock is trading at

$$215.$ Calculate the investor's return from the short sale, ignoring transaction costs and interest.

Identify five benefits of financial intermediation and briefly explain how each improves the efficiency of the financial system.