1. The two most basic components of any investment opportunity are risk and return. Define each and explain how they are related in the investment world. Why does their relationship matter to you as an investor?
2. In 200 words, explain what it means to be a contrarian investor? How would a contrarian investor use technical analysis?
3. You purchased 50 shares of GE common stock on margin at $60 per share. Assume the initial margin is 50% and the maintenance margin is 35%. Below what stock price level would you get a margin call? Assume the stock pays no dividend; ignore interest on margin.