You believe the stock in Freeze Frame Co. is going to fall, so you short 1,600 shares at a price of $72. The initial margin is 50 percent. Construct the equity balance sheet for the original trade. Now construct an equity balance sheet for a stock price of $63 and a stock price of $79. What is your margin at each of these stock prices? What is your effective annual return if you cover your short position at each of these prices in five months?

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