Assume that you would like to buy 100 shares of a stock that is currently priced at $ 70. The initial margin is 75% and maintenance margin is 35%.

If the stock pays $ 2 per share in annual dividend; the cost of borrowing is 3% per year; transaction costs are $ 80 calculate total dollar return and return on investment. Show your results step by step. Assume that you had bought the stock at $70 per share and it is now at $ 80 and you own 100 shares. Show your results below and in step by step.

Capital gain =

Dividend =

Interest cost=

Total dollar return =

Total % return on investment =

You sell short 100 shares of stock at a price of $100 per share with an initial margin of 65 percent and maintenance margin of 25 percent. Show this in a T balance sheet format, and calculate your margin.

Price = 100
Credit for short sale Cash Deposit =	Liability: Market Value of short sale Equity =
Total Assets =	Liabilities + Equity=

Margin =

If the price falls to $90 per share, show this in a T balance sheet format, and calculate your margin.

Price = 90
Credit for short sale = Cash Deposit =	Liability: Equity =
Total Assets	Liabilities + Equity =

Margin =