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6. You are bullish on MSFT. You purchase 100 shares of MSFT stock at the market price using $14,000 of your own money and some additional funds, which you borrow from your broker at an interest rate of 6% per year. (a) What is the holding period return of this buy on margin if the price of MSFT stock increased by 15% over the next year? (b) What if MSFT stock price increased by 2%? (c) If the maintenance margin requirement is 35%, how far can the price of MSFT stock fall before you get a margin call? (d) Your friend is also bullish on MSFT stock and she purchases 100 shares of MSFT stock at the market price by using $20,000 of her own money and borrow the rest from her broker at an interest rate of 6% per year also. Answer (a), (b) and (c) above for your friend. (e) Compare your answers to all the questions above and relate to the amount of money borrowed in your and your friend's investment. 6. You are bullish on MSFT. You purchase 100 shares of MSFT stock at the market price using $14,000 of your own money and some additional funds, which you borrow from your broker at an interest rate of 6% per year. (a) What is the holding period return of this buy on margin if the price of MSFT stock increased by 15% over the next year? (b) What if MSFT stock price increased by 2%? (c) If the maintenance margin requirement is 35%, how far can the price of MSFT stock fall before you get a margin call? (d) Your friend is also bullish on MSFT stock and she purchases 100 shares of MSFT stock at the market price by using $20,000 of her own money and borrow the rest from her broker at an interest rate of 6% per year also. Answer (a), (b) and (c) above for your friend. (e) Compare your answers to all the questions above and relate to the amount of money borrowed in your and your friend's investment

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