Q1. A security trades for$40 per share of round lot. The margin requirement and maintenance margin are 60% and 35% respectively. Show and explain why a prevailing price of $35 per share may or may not trigger a margin call (5 Points). What is the value of the margin call if any (5 Points)?

Alluding to Q1, suppose the security pays a dividend of 0.50 cents per share and is expected to grow to $45 per share; what is the expected rate of return (5 Points)?