Two siblings, Matteo and Jannik, decide to invest in Conundrums Incorporated. Matteo is optimistic and expects the price to rise while his contrarian sibling expects the reverse. Both invest in Conundrums Incorporated when the price is $50 per share. Matteo puts up $5,000 of his own money to invest and borrows an additional $5,000 from a broker at an interest rate of 0% per year.

- What will be Matteos rate of return if Conundrums Incorporated goes up by 20% during the next year and the stock pays no dividends? - If the maintenance margin is 30%, how far would the price of Conundrums Incorporated have to fall before Matteo would get a margin call?

Jannik sells short 100 shares. - What is the monetary value of the cash or securities Jannik would put into his brokerage account if the brokers initial margin requirement is 60% of the value of the short position? - How high can the price of the stock go before Jannik gets a margin call if the maintenance margin is 30% of the value of the short position?