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 $R_i^{EZ}$ denote the

Easyjet stock return, we have that the mean is $E(R_i^{EZ})=4\%$ and the standard

deviation is $(R_i^{EZ})=2\%.$ The risk free rate is $R_f=1\%.$ We denote the "excess

return" of Easyjet stocks as the difference between this stock return and the

risk$-$free asset: $R_i^{EZ}-R_f.$

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$).$