Suppose that Xtel currently is selling at $$44$ per share. You buy $500$ shares using $$18\mathrm{.}000$ of your own money,borrowing the remainder of the purchase price from your broker. The rate on the margin loan is $7\%.$

Required:

a$.$ What is the percentage increase in the net worth of your brokerage account if the price of Xtel immediate$/$ychanges to: $($i$)$ $$50\mathrm{.}60$; $($il$)$ $$44$: $($il$)$ $$37\mathrm{.}40?$ What is the relationship between your percentage return and thepercentage change in the price of Xtel?

b$.$ lf the maintenance margin is $25\%,$ how low can Xtel's price fall before you get a margin call?c$.$ How would your answer to $($b$)$ change if you had financed the initial purchase with only $$1\mathrm{.}000$ of your ownmoney?

d$.$ What is the rate of return on your margined position $($assuming again that you invest $$18\mathrm{.}000$ of your own moneyif Xtel is selling after $1$ year at: $($l$)$ $$50\mathrm{.}60$: $($i$)$ $$44,($ll$)$ $$37\mathrm{.}40?$ What is the relationship between your percentagereturn and the percentage change in the price of Xtel? Assume that Xtel pays no dividends.e$.$ Continue to assume that a year has passed. How low can Xtel's price fall before you get a margin call?

Complete this question by entering your answers in the tabs below.

R$$quired A

Required B

Required C

Required D

Required E

Continue to assume that a year has passed. How low can Xtel's price fall before you get a margin call?

Note: Round your answer to $2$ decimal places.

Margin call will be made at price

$31\mathrm{.}38$ or lower

Required D

Required E