Question $14$

As of March $9,2021,$ the price of GameStop Corp. $($ticker: GME$)$ is $$246\mathrm{.}90$ and its closing price

on March $10,2020$ is $$4\mathrm{.}23.$ You believe GME is overvalued and decide to short$-$sell GME. You

have $$134,773$ worth of Treasury Bills in your brokerage account that can be used as collateral.

Your broker requires an initial margin of $50\%$ and a maintenance margin of $39\%.$ You must also

set aside $100\%$ of the cash proceeds as collateral. You decide to short as many shares as you can

with the collateral you have. Pay special attention that you cannot purchase$/$sell$/$trade fractional

shares.

How much cushion $($in dollars$)$ do you have before you receive a margin call from your broker?

That is$,$ by how much the stock price could move in the "wrong" direction before you receive a

margin call? Enter a number with two decimal points.

Your stock portfolio earned $10\%,-14\%,$ and $10\%$ for the last three years. What is your

annualized return for the last three years on average? Enter a number with two decimal points.

Answer the question in percentage terms, i$.$e$.,$ if your return is $10\%$ or $0\mathrm{.}1,$ enter $10\mathrm{.}00.$

A stock has a return that follows the normal distribution with a mean of $10\%$ and a standard

deviation of $8\%.$ What is the probability that the stock will have a return between $10-8\%$ and

$10+2*8\%?$ The one$-,$ two$-,$ and three$-$sigma probability of the normal distribution is $68\%,95\%,$

and $99\%.$ Enter a number with one decimal points. Answer the question in percentage terms, i$.$e$.,$

if the answer is $20\%,$ enter $20\mathrm{.}0.$

Your stock portfolio earned $10\%,-14\%,$ and $10\%$ for the last three years. What is your

annualized return for the last three years on average? Enter a number with two decimal points.

Answer the question in percentage terms, i$.$e$.,$ if your return is $10\%$ or $0\mathrm{.}1,$ enter $10\mathrm{.}00.$

The market maker offers the following bids and asks with respective depth to the market:

You are not happy with the price impact from your trade so let's do it again but trade in a smaller

amount this time. Say you submit a market sell order with $1,529$ shares, what's your weighted

average execution price? Enter a number with two decimal points.

The market maker offers the following bids and asks with respective depths:

If you submit a market sell order with $1,745$ shares, what's your weighted average execution

price? Enter a number with two decimal points.