Suppose you have $2,500 to invest (this is your equity that you can put in) in Exxon, which is currently trading at $42.62. You decide to do this via a brokerage firm. The broker applies Reg T that stipulates that he/she can pay up to 50% of the total price of margin security for new or initial purchases. The broker charges 5% interest. How many shares of Exxon can you buy at max?

b. (1 point): Suppose the broker requires a 30% margin. What would Exxon's price have to be for a margin call?

c. (1 point): What would be the return on your margin investment (without borrowing cost), assuming the number of shares you bought in a. and sell all of them at the price of 45?

d. (1 point): Explain the difference between the overall return on Exxon Stock and the return on your margin investment (without borrowing cost). (Hint: first calculate ROI including borrowing costs and explain why it is different from ROI w/o borrowing costs.)