XYZ stockbroker offers investors financing to buy stocks with the following requirements:

- Initial margin

- Minimum margin

- Interest rate

- If subjected to a margin call, the investor must deposit some fund to repay part of his debt and return the position to initial margin.

You buy 100,000 QRS stocks at the price of $5,000/stock using the margin facility.

Instructions :

a) At what price are you subjected to a margin call?

b) If QRS stock price drops to $2,500, how much $ margin do you have to deposit?

c) How much return do you earn if in the next month the stock price is $4,500, and you sell all your stocks and pay out your debt and its interest?