Use the following to answer the next three questions The stock of Flop Industries is trading at $45. You feel the stock price will decline, so you short 800 shares at an initial margin of 75 percent. The maintenance margin is 35 percent and your broker charges a 6% annual rate on borrowed funds. Find your total deposit with your broker.

A. 36000

B. 63000

C. 45000

D. None of the above

Will you receive a margin call if the stock climbs to $50 the day after you open your position?

		Yes
		No

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

	A,	-.1037
	B.	-.089
	C.	-.3561
	D.	-.1187