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Suppose that XTel currently is selling at $40 per share. You buy 500 shares using $12,000 of your own money, borrowing the remainder of the purchase price from your broker. The rate on the margin loan is 7%. Required: a. What is the percentage increase in the net worth of your brokerage account if the price of XTel immediately changes to (i) $44; (ii) $40; (ii) $36? (Leave no cells blank - be certain to enter "0" wherever required. Negative values should be indicated by a minus sign. Round your answers to 2 decimal places.) b. If the maintenance margin is 40%, how low can XTels price fall before you get a margin call? (Round your answer to 2 decimal places.) c. How would your answer to requirement b would change if you had financed the initial purchase with only $10,000 of your own money? (Round your answer to 2 decimal places.) d. What is the rate of return on your margined position (assuming again that you invest $12,000 of your own money) if XTel is selling after one year at (i) $44; (ii) $40; (iii) $36? (Negative values should be indicated by a minus sign. Round your answers to 2 decimal places.) e. Continue to assume that a year has passed. How low can XTels price fall before you get a margin call? Note: Assume maintenance margin of 40% (Round your answer to 2 decimal places.)

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