Question 2 (12 marks) You are bearish on HSBC share and decide to short 1,000 shares of HSBC at $50 as you expect the stock price will go down. The initial margin and maintenance margin requirement is 50% and 40% respectively. Ignoring margin interests. a) Construct the account balance sheet once the short selling position is set. (3 marks) b) (i) Compute the holding period percentage return if you close the position at $40 three months later (Ignoring the interest cost of borrowing stock). (3 marks) (ii) Calculate the annual percentage return (APR) and the effective annual return (EAR) of your trade in (b) (i). (2 marks) c) Calculate the price level that you will receive a margin call. ( 2 marks) d) What is the risk of short selling to investor? Briefly explain. (word limit: 30) (2 marks)