Please solve utgently.

1. You short 1000 shares of WIC (WIC) at $40 per share and give your broker $23,000 to establish your margin account. One year has passed (t=1), and WIC did not pay a dividend. The maintenance margin is set at 30%. If you earn an interest of 2% on the funds in your margin account ($23,000), what is WIC's price at which you will receive a margin call?

	A.	$39.94
	B.	$48.82
	C.	$50.06
	D.	$31.18

1. You purchased 500 shares of KPMG stock at $56 per share on 50% margin. If the maintenance margin is 30%, what is KPMG's price in which you will receive a margin call?

	A.	$51.07
	B.	$55.21
	C.	$40.00
	D.	$43.69

1. Fund A has an expected return of 21%, a standard deviation of 28%, and a beta of 1.3. Fund B has an expected return of 17%, a standard deviation of 24%, and a beta of 0.7. The risk-free rate is 8%. If you have a well-diversified portfolio, you can take advantage of an arbitrage opportunity by borrowing (or shorting) ___ and buying ___.

	A.	Fund B, Risk-free rate
	B.	Fund B, Fund A
	C.	Risk-free rate, Fund A
	D.	Fund A, Fund B

1. The expected return on the market portfolio is 15%. The risk-free rate is 8%. Stock MRK has an expected return of 16% and a beta of 1.25. Based on the CAPM, ___.

	A.	MRKs alpha is -0.75%
	B.	MRK is on the SML
	C.	MRKs alpha is 0.48%
	D.	MRK is underpriced