Suppose that XTel currently is selling at $50 per share. You buy600 shares using $22,500 of your own money, borrowing the remainderof the purchase price from your broker. The rate on the margin loanis 8%.

a. What is the percentage increase in the networth of your brokerage account if the price of XTelimmediately changes to (a) $55; (b) $50; (c) $45?(Leave no cells blank - be certain to enter "0" whereverrequired. Negative values should be indicated by a minus sign.Round your answers to 2 decimal places.)

Percentage Gain?

Percentage Gain?

Percentage Gain?

b. If the maintenance margin is 25%, how low canXTel’s price fall before you get a margin call? (Round youranswer to 2 decimal places.)

Price?

c. How would your answer to requirement 2 wouldchange if you had financed the initial purchase with only $15,000of your own money? (Round your answer to 2 decimalplaces.)

Strike Price ?

d. What is the rate of return on your marginedposition (assuming again that you invest $22,500 of your own money)if XTel is selling after one year at (a) $55; (b) $50; (c)$45? (Negative values should be indicated by a minus sign.Round your answers to 2 decimal places.)

Rate Of Return?

Rate Of Return?

Rate Of Return?

e. Continue to assume that a year has passed.How low can XTel’s price fall before you get a margin call?(Round your answer to 2 decimal places.)

Price ?

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