Suppose on the first trading day of the year, you purchased one share of your stock, with an initial margin requirement of 50% (so you borrow the maximum). Suppose the MMR is 35%.

Suppose on the first trading day of the year, you purchased one share of your stock, with an initial margin requirement of 50% (so you borrow the maximum). Suppose the MMR is 35%. You can use Factset’s historical prices, or any other data provider. However, be sure to clearly show your work for the calculations.

a. Consider the closing price of your stock on April 17. What is your total return? (Ignore dividends in answering this question).

b. Suppose that your stock price fell to its 52-week low. Will you experience a margin call?