Part A:

You buy 500 shares of stock at a price of $94 and an initial margin of 50 percent. If the maintenance margin is 40 percent, at what price will you receive a margin call? (Do not round intermediate calculations. Round your answer to 2 decimal places.)

Margin Call Price:

PART B

You purchase 650 shares of 2nd Chance Co. stock on margin at a price of $45. Your broker requires you to deposit $17,500.

a. Suppose you sell the stock at a price of $50. What is your return? What would your return have been had you purchased the stock without margin? (Do not round intermediate calculations. Enter your answers as a percent rounded to 2 decimal places.)

With Margin: %

Without Margin: %

b. What is your return if the stock price is $44 when you sell the stock? What would your return have been had you purchased the stock without margin? (A negative value should be indicated by a minus sign. Do not round intermediate calculations. Enter your answers as a percent rounded to 2 decimal places.)

With Margin: %

Without Margin: %