Suppose that Xtel currently is selling at $$48$ per share. You buy $400$ shares using $$14,000$ of your own money, borrowing the

remainder of the purchase price from your broker. The rate on the margin loan is $5\%.$

Required:

a$.$ What is the percentage increase in the net worth of your brokerage account if the price of Xtel immediately changes to: $($i$)$ $$51\mathrm{.}36$; $($ii$)$

$$48$; $($iii$)$ $$44\mathrm{.}64?$ What is the relationship between your percentage return and the percentage change in the price of $x$ tel?

b$.$ If 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 $$9,600$ of your own money?

d$.$ What is the rate of return on your margined position $($assuming again that you invest $$14,000$ of your own money$)$ if Xtel is selling

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.

What is the percentage increase in the net worth of your brokerage account if the price of Xtel immediately changes to: $($i$)$

$$51\mathrm{.}36$; $($ii$)$ $$48$; $($iii$)$ $$44\mathrm{.}64?$ What is the relationship between your percentage return and the percentage change in the

price of Xtel?

Note: Leave no cells blank $-$ be certain to enter $"0"$ wherever required. Negative values should be indicated by a minus sign.

Round your answers to $2$ decimal places.