1. You purchased 300 shares of a stock on margin at $45 per share.

Assume the initial margin is 60% and the maintenance margin is 40%. At what stock price will you get a margin call? (Assume the stock pays no dividends, and ignore interest on the margin loan.)

2.You sell short 500 shares of a stock that are currently selling at $20 per share. You post the 55% margin required on the short sale. If your broker requires a 35% maintenance margin, at what stock price will you get a margin call?(Assume you earn no interest on the funds in your margin account, and the stock pays no dividends.).

3.Suppose you purchase a T-bill maturing in 50 days which has a par value of $10,000 and a bank discount rate of 9.50%. What are the price and the bond equivalent yield of this T-bill? Also, what would be the annual percentage rate of return and the effective annual rate of return from this investment if you hold this T-bill until its maturity?

4. You are considering investing $1,000 in a complete portfolio. The complete portfolio is composed of T-bills that have 3% return, and a risky portfolio P constructed with three risky securities X, Y and Z. The optimal weights of X, Y and Z in P are 20%, 50% and 30%, respectively. X, Y and Z have an expected return of 12%, 8% and 10%, respectively. What are the dollar values of your investment in each of X, Y, Z and T-bills if you decide to hold a complete portfolio that has an expected return of 7%?

5. A portfolio is composed of two stocks, A and B. The returns of stock A have a standard deviation of 15%, while the returns of stock B have a standard deviation of 9%. Stock A comprises 65% of the portfolio, and stock B comprises 35% of the portfolio. What is the correlation coefficient between the returns on stocks A and the returns on stock B if the standard deviation of the returns on the portfolio is 12%?

6. One-year, two-year, and three-year maturity zero-coupon bonds have yields to maturity of 6%, 9%, and 11%, respectively. What is the forward rate for the second year? Also, what is the forward rate for the third year?

7. A stock just paid a dividend of $3. Dividends are expected to grow at 10% per year for the first four years and then at 5% per year thereafter. If the market capitalization rate on the stock is 8%, what is the price of the stock?

8.A firm expects to earn $7 per share next year. The firm’s ROE is 12% and its dividend payout ratio is 45%. If the firm’s market capitalization rate is 8%, what is the present value of its growth opportunities?

9. A stock has an expected return of 15% and a beta of 1.4. The expected return on the market portfolio is 9%, and the risk-free rate is 3%. What is the stock’s alpha based on the CAPM?

10. A stock is expected to pay a dividend of $4 in the upcoming year. Dividends of the stock are expected to grow at the rate of 6% per year. The stock is trading in the market today at $146. The risk-free rate of return is 3%, and the expected return on the market portfolio is 10%. Assume investors use the CAPM to compute the market capitalization rate on the stock and also use the constant-growth dividend discount model to determine the price of the stock. Based on the constant-growth dividend discount model and the CAPM, what is the beta of the stock?

Please show exact calculations.
I’d appreciate it if you put signs($,% etc)

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