You have $10m dollars to invest in stock AAA. Todays price is $100 per share. Youve determined that in three months, the value of the stock will be either $90, $100, $110, or $120 each with equal probability. You want to buy on the margin. The maximal initial margin requirement is 50% which you want to use all of. You borrow at r=5%.

a) What are the returns in each state of the world? b) What are the expected returns to the entire position using margin? c) If the Maintenance Margin Requirement is 25% how far would the price of the stock have to fall before a margin call would take place?