1. You sell short 400 shares of Apple that are currently selling at $200 per share. You post the 60% margin required on the short sale, and the maintenance margin requirement is 25%. At what price would you receive a margin call (assume the margin call happens immediately).

		$240
		$248
		$256
		$260
		None of the above

1. You short-sell 10 shares of Amazon.com, Inc today. The stock price is $2,000 per share. What is your maximum possible gain of this trade when you cover your position in the future (ignoring transactions costs)?

		$2,000
		$10,000
		$20,000
		$100,000
		Unlimited

1. Investor X puts up $10,000 but borrows an equal amount of money from her broker to double the amount invested to $20,000. The broker charges 8% interest on the loan. The stock was originally purchased at $10 per share and in one year, Investor X sells the stock for $12. Investor Y does not believe in borrowing to buy shares and invests $20,000 of his own money in the same stock. What is the difference in rate of return between Investor X and Investor Y?

		0%
		2%
		6%
		12%
		None of the above

1. The table presents forecasts of the returns of stock market and probability of each state of the economy for next year. Calculate the standard deviation.

State of Economy		Return	Prob. of State
Recession		-12%	0.15
Normal		6%	0.60
Expansion		20%	0.25
			6.9%
			8.9%
			9.8%
			14.4%
			None of the above