On January $3,2005,$ you short sold $5,000$ shares of Ebay, a pioneer in internet person$-$to$-$person

trading, at the price of $$114\mathrm{.}11$ per share. The initial margin requirement is $65\%$ and the maintenance

margin is $30\%.$ Short sale proceeds yield $2\%$ and the initial margin yields $3\%($both rates are annual

rates$).$

$($a$)$ Determine your short sale proceeds and the initial margin requirement.

$($b$)$ To what price must Ebay climb for you to receive a margin call?

$($c$)$ A month later, on February $3,2005,$ Ebay fell to $$77\mathrm{.}22.$ What was the actual margin in your

account?

$($d$)$ Suppose that you closed your account on February $3,2005.$ What was the return on your

investment?