1. What cash deposit is required if an investor shorts 5 call options (500) shares at 7.50$ each when the exercise price is 105 and the share price is 107?
2. Lucin earns $30,000 per year. She pays 30 percent of her gross income in federal, state, and social security taxes. She has fixed expenses of $750 per month and variable expenses that average $900 per month. What is her net cash flow for the year?
3. A stock has a beta of .85, the expected return on the market is 11 percent, and the risk-free rate is 3 percent. What must the expected return on this stock be?