Suppose you purchase 500 shares of stock at $48 per share with an initial margin loan of $12,000. Suppose the call money rate is 8 percent and you are charged a 2 percent premium over this rate. The commission costs are 1% of the transaction value. Assume you pay 10% of margin loan as interest expenses upon receive the margin call. When a margin call occurs, you will liquidate shares at the margin call price, pay off the margin loan and deposit the remiaining cash in the brokerage account. If your broker requires a 30 percent maintenance margin, at what share price will you be subject to a margin call ? Calculate your return on investment for each of the following share prices one year later. Ignore dividends. (15 Marks) a. $56 b. $48 c. $32 Suppose you purchase 500 shares of stock at $48 per share with an initial margin loan of $12,000. Suppose the call money rate is 8 percent and you are charged a 2 percent premium over this rate. The commission costs are 1% of the transaction value. Assume you pay 10% of margin loan as interest expenses upon receive the margin call. When a margin call occurs, you will liquidate shares at the margin call price, pay off the margin loan and deposit the remiaining cash in the brokerage account. If your broker requires a 30 percent maintenance margin, at what share price will you be subject to a margin call ? Calculate your return on investment for each of the following share prices one year later. Ignore dividends. (15 Marks) a. $56 b. $48 c. $32