Problem 2 You sell short 100 shares of ABC at $75 a share The initial margin is 50 % The cost of borrowing money in the margin account in 5 % Ignore cost of borrowing shares The stock pays a dividend of $2 a share The minimum maintenance requirement is 20 % Calculate the price at which you will receive a margin call - base your calculation on the information 5) that is present when you initiate the short sale-hence at time t-0 6) In 2 years the stock rises to $100 a share-what is the annual percentage return on your investment? 7) What is the equity in your account after 2 years and would you have received a margin call before the 2-year time period elapsed? Explain 8) Define and give an example of each asset class: Money Market, Bond, Equity, and Derivative 9) What type of index is the S&P 500 and what are the largest 5 companies that comprise that index? 10) Explain the difference between a call and put and under what circumstances you would purchase