(Solved): correct calculations thanks :))))))))) [This problem contributes \( 15 \% \) to your overall mark i ...

correct calculations thanks :)))))))))

[This problem contributes \( 15 \% \) to your overall mark in this course. You should answer all the questions.] Question 1 ( 7 marks) a) Your client is considering investment in one of the 2 assets: Stock A, and Stock B. Probability distribution of returns on Stock A and B are given in the following table. You may assume that the risk-free interest rate is \( 5 \% \) per annum. 1) On the basis of excess returns per unit of risk, which stock would you recommend to your client? (1 mark) 2) On the basis of skewness, which stock would you recommend to your client? (2 marks) b) Suppose you are bearish on BHP and decide to sell short 100 shares at the current market price of \( \$ 40 \) per share. If the broker's initial margin requirement is \( 60 \% \) of the value of the short position and the maintenance margin is \( 30 \% \). 1) If the price of BHP immediately changes to \( \$ 55 \), will you receive a marginal call? If so, please calculate the additional margin you need to deposit in the account (2 marks) 2) How high can BHP's price increase before you get a margin call? (2 marks)