1. You sell short 400 shares of Apple that are currently sellingat $200 per share. You post the 60% margin required on the shortsale, and the maintenance margin requirement is 25%. At what pricewould you receive a margin call (assume the margin call happensimmediately).

		$240
		$248
		$256
		$260
		None of the above

1. You short-sell 10 shares of Amazon.com, Inc today. The stockprice is $2,000 per share. What is your maximum possible gain ofthis trade when you cover your position in the future (ignoringtransactions costs)?

		$2,000
		$10,000
		$20,000
		$100,000
		Unlimited

1. Investor X puts up $10,000 but borrows an equal amount of moneyfrom her broker to double the amount invested to $20,000. Thebroker charges 8% interest on the loan. The stock was originallypurchased at $10 per share and in one year, Investor X sells thestock for $12. Investor Y does not believe in borrowing to buyshares and invests $20,000 of his own money in the same stock. Whatis the difference in rate of return between Investor X and InvestorY?

		0%
		2%
		6%
		12%
		None of the above

1. The table presents forecasts of the returns of stock market andprobability of each state of the economy for next year. Calculatethe standard deviation.
   

State of Economy	Return	Prob. of State
Recession	-12%	0.15
Normal	6%	0.60
Expansion	20%	0.25
		6.9%
		8.9%
		9.8%
		14.4%
		None of the above