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Problem 3-18 You are bullish on Telecom stock. The current market price is $44 per share, and you have $2,200 of your own to invest.

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Problem 3-18 You are bullish on Telecom stock. The current market price is $44 per share, and you have $2,200 of your own to invest. You borrow an additional $2,200 from your broker at an interest rate of 5.5% per yearand invest $4,400 in the stock. a. What will be your rate of return if the price of Telecom stock goes up by 7% during the next year? (Ignore the expected dividend.) (Round your answer to 2 decimal places.) Rate of return b. How far does the price of Telecom stock have to fall for you to get a margin call if the maintenance margin is 30%? Assume the price fall happens immediately. (Round your answer to 2 decimal places.) Stock price falls below

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