you will sell short 300 shares of MMM corporation class-A common stock to protect your capital gains position at the end of your firm's tax year(2/28/07). You agree to make this short sale at ''full'' 50% initial margin, and the broker-commissions' R US-enforces a 40% maintenance margin standard, and a $10,000 absolute equity minimum on short accounts.

7. If MMM is sold short @ $95/share (and you meet initial margin

deposit requirements), opening account equity value is equal to:

a. $14,250 b. $28,500 c. $42,750 d. $32,000 e. $10,000

8. Price rises to $104/share, changing your percentage margin to:

a. 45.67% b. 40.53% c. 37.02% d. 25.41% e. 81.05%

9. Will you receive a margin call (remember to check both the

percentage/absolute criteria)? What is the minimum call amount?

a. yes/$2700 b. yes/$930 c. yes/$1550 d. yes/$4050 e. no call/$0

10. Threshold or trigger price (P^*) for this 3M trade- at which

the brokers(%)maintenance margin standard is reached- equals:

a. $79.16 b. $158.33 c. $88.21 d. $101.79 e. $106.55

11. What is the rate of return on this short margin investment (assume no dividends, brokerage fees, interest, etc. is yet paid)?

a. +19.30% b. -19.30% c. -8.33% d. -18.95% e. +9.47%

pleas show the process.