Use the following to answer the next three questions

1) The stock of Flop Industries is trading at $45. You feel the stock price will decline, so you short 600 shares at an initial margin of 75 percent. The maintenance margin is 45 percent and your broker charges a 5% annual rate on borrowed funds.

Find your total deposit with your broker.

		27000
		63000
		33750
		None of the above

2) Will you receive a margin call if the stock climbs to $55 the day after you open your position? yes or no

Find your return on invested capital if you close your position after 9 months and the stock is trading at $48.5.

		-.1412
		-.1162
		.0912
		-.1187