On November $20,2003,$ you short sold $5,000$ shares of Home Depot at the price of $$35$

per share. The initial margin requirement is $60\%$ and the maintenance margin is $30\%.$

You can invest your short sale proceeds at $1\%$ per year. The annual interest on the loan

you receive from your broker is also $1\%.$

a$)$ To what price must Home Depot climb for you to receive a margin call. $($Assume for

this part that no interest expense accrued on your loan$)?$

b$)$ Assume you closed your account on February $20,2004$ when each Home Depot share

was being traded at $$37.$ What was the return on your investment? $($Don$\text{'}$t forget to

consider the cost of your loan and reinvestment your short sale proceeds$)$