Suppose you just bought the new Windoze 8 and that you realize that it is really bad. As a result, you are sure that the price of Microsoft stock (currently trading for $34.93) is going to fall and you tell your broker to short 150 shares.

1. If the broker's initial margin is 50%, what is the value of personal assets you must add to your account to meet the margin requirement?

2. Assume you have added to your account the value of personal assets determined in part 1. If the broker has a maintenance margin of 30%, what is the highest value the price of Microsoft stock can reach before you are issued a margin call?

3. If the price of Microsoft stock falls to $20, what is the profit you make from the short sale (in $)?