You are bullish on Telecom stock. The current market price is $80 per share, and you...

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You are bullish on Telecom stock. The current market price is$80 per share, and you have $8,000 of your own to invest. Youborrow an additional $8,000 from your broker at an interest rate of9.0% per year and invest $16,000 in the stock.

a.
What will be your rate of return if the price of Telecom stockgoes up by 11% during the next year? (Ignore the expecteddividend.) (Round your answer to 2 decimalplaces.)

Rate of return %

b.
How far does the price of Telecom stock have to fall for you toget a margin call if the maintenance margin is 30%? Assume theprice fall happens immediately. (Round your answer to 2decimal places.)

Stock price falls below $

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You are bullish on Telecom stock. The current market price is$80 per share, and you have $8,000 of your own to invest. Youborrow an additional $8,000 from your broker at an interest rate of9.0% per year and invest $16,000 in the stock.a.What will be your rate of return if the price of Telecom stockgoes up by 11% during the next year? (Ignore the expecteddividend.) (Round your answer to 2 decimalplaces.) Rate of return%b.How far does the price of Telecom stock have to fall for you toget a margin call if the maintenance margin is 30%? Assume theprice fall happens immediately. (Round your answer to 2decimal places.) Stock price falls below$