Your trading account has $500,000 of cash on Jan 2,2019 , before you begin trading on the same date. The margin requirement is 25% intraday and 50% overnight or longer. There are no commission charges. Your brokers charges a 1.5% annual interest on all loans and credits interest at 0.6% on all cash balances. A stock's borrow rate is 0.32% for shorting purposes. On the morning of Jan 2, 2019, AOS Inc has NYSE-listed convertible bonds outstanding with following features: Coupon rate: 9.00% (with coupon payable every six months) Yield: 7.80% (compounded semi-annually) Maturity: Jul 2, 2028 Coupon payable: Every Jan 2 and Jul 2 Each $1,000 face value convertible converts into 45 AOS Inc shares. The AOS Inc shares are currently trading at $23.50. The delta of longdated, at-the-money AOS call options is 0.9 . In addition, AOS Inc declares the following dividends during the year which are paid to the lender of the shares using the remaining cash in your account. - Feb 2, 2019: $0.20 per share - May 2, 2019: $0.20 per share - Aug 2, 2019: $0.22 per share - Nov 2, 2020: $0.22 per share You put together a convertible arbitrage strategy where you purchase 450AOS Inc convertible bonds, fully hedging out the option price risk, on Jan 2, 2019, and close out the position on Oct 2, 2019, when the convertibles are yielding 6.55% and the stock is trading at $22.09 per share. 1. What is your annualized return on the account's equity immediately after closing out the position on Oct 2 ? 2. What is the balance of your account's equity immediately after closing out the position on Oct 2? 3. Of the original balance, how much cash will still be in the account on Jan 2 immediately after making all the initial trades? 4. How much total broker loan and interest will you have to pay when the position is closed