You have $40,000 to invest in Sophie Shoes, a stock selling for $80 a share. The initial margin requirement is 65 percent. Do not round intermediate calculations. Round your answers to two decimal places. Use a minus sign to enter negative values, if any. a. Ignoring taxes and commissions, calculate your rates of return if the stock rises to $90 a share and if it declines to $30 a share assuming you pay cash for the stock. Rate of return if the stock rises to $90 a share: % Rate of return if the stock declines to $30 a share: b. Ignoring taxes and commissions, calculate your rates of return if the stock rises to $90 a share and if it declines to $30 a share assuming you buy it using maximum leverage. Rate of return if the stock rises to $90 a share: % Rate of return if the stock declines to $30 a share: % Problem 3-03 Suppose you buy a round lot of Francesca Industries stock (100 shares) on 60 percent margin when the stock is selling at $30 a share. The broker charges a 10 percent annual interest rate, and commissions are 3 percent of the stock value on the purchase and sale. A year later you receive a $0.55 per share dividend and sell the stock for $38 a share. What is your rate of return on Francesca Industries? Do not round intermediate calculations. Round your answer to two decimal places. % Problem 3-04 You decide to sell short 300 shares of Charlotte Horse Farms when it is selling at its yearly high of $62. Your broker tells you that your margin requirement is 65 percent and that the commission on the purchase is $420. While you are short the stock, Charlotte pays a $2.45 per share dividend. At the end of one year, you buy 300 shares of Charlotte at $49 to close out your position and are charged a commission of $410 and 14 percent interest on the money borrowed. What is your rate of return on the investment? Do not round intermediate calculations. Round your answer to two decimal places