You spend $400,000$ on Easyjet shares. The bank lends you $120,000$ for this purchase.

$($a$)$ What is the margin in this case?

$($b$)$ Let$$s say that the mean of the return of Easyjet stocks this year is $4\%$ and the

standard deviation is $2\%.$ In mathematical notation, letting REZ denote the i

Easyjet stock return, we have that the mean is E$($REZ$)=4\%$ and the standard i

deviation is $\backslash$sigma $($REZ$)=2\%.$ The risk free rate is R $=1\%.$ We denote the $$excess if

return$$ of Easyjet stocks as the difference between this stock return and the risk$-$free asset: REZ $$ R $.$

if

Calculate mean and standard deviation of excess returns of Easyjet stock.

Calculate the mean and standard deviation of the return for your Easyjet stock purchase on margin, when the margin is as in a$).$