suppose that ge is currently selling for 21 a share. you buy 100 shares using 1050 of your own momey borrowing the remainder of the purchase price from your broker.

a) assume that the maintence margin is 5% a year has passed and the interest rate on the margin loan is 5%. How long can ges price fall beore you get a margin call?

B) what is the rate of return on your margined position if ge is selling at 25 after one year and the rate on the margin loan is 5%

C) how much money would you have to add to your account in order to satisfy the 25% maintenance margin requirement if the stock was trading at 11.5 a share and the rate on the margin loan is 5%