Suppose that it is the end of the day on December $11,2009.$ The current stock price of

Google is $$590\mathrm{.}51.$ You have $$10,000$ to invest and decide to buy Google stock. At the

end of the day on January $11,2010,$ you decide to sell your position in Google stock.

What is your return?

$2.$ Now suppose that on December $11,2009,$ you are extremely bullish on Google. Not

only do you want to buy Google stock, but you want to buy on margin. Suppose that

your broker requires a margin of $50\%.$ Also, your broker charges you interest at a rate

of $0\mathrm{.}03\%$ per day. You decide to invest so that your initial margin is $60\%.$ What is the

value of stock that you buy? How many shares did you buy?

$3.$ Continuing on the above margin question: Suppose that you sell at the end of the day

on January $11,2010[31$ days$].$ What is your return? Compare this to the case where

you did not buy on margin.

$4.$ Suppose that you instead held Google until February $11,2010[62$ days$].$ What is your

return? Compare this to the case where you did not buy on margin. What lessons do

you learn about buying on margin?