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Suppose that you sell short 200 shares of Xtel, currently selling for $100 per share, and give your brokr $10,000 to establish your margin account.

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Suppose that you sell short 200 shares of Xtel, currently selling for $100 per share, and give your brokr $10,000 to establish your margin account. Required: a. If you earn no interest on the funds in your margin account, what will be your rate of return after one year if Xtel stock is selling at: (i) $110; (ii) \$100: (iii) \$95? Assume that Xtel pays no dividends. b. If the maintenance margin is 25%, how high can Xtel's price rise before you get a margin call? c. Redo parts (a) and (b), but now assume that Xtel aiso has paid a year-end dividend of $1 per share. The prices in part (a) should be interpreted as ex-dividend, that is, prices after the dividend has been paid

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