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Homework 1 Total: 112 Please show all steps you take to get your answers. 1. Below is the balance sheet of GameStop in 2020. Please identify two real assets and two items which can be traded as financial assets from the table. For each of the financial assets you identified, please indicate: a) the financial institutions that could possibly involved in the issuance of the financial asset; b) which market the financial asset could possibly be traded at; and c) in what way(s) the financial assets you identified are different from each other. (10) ASSETS LIABILITIES AND STOCKHOLDERS’ EQUITY Current assets: Current liabilities: Cash and cash equivalents $ 508.50 Accounts payable $ 341.80 Restricted cash 110.00 Accrued liabilities and other current liabilities 626.80 Receivables, net 105.30 Current portion of operating lease liabilities 227.40 Merchandise inventories 602.50 Short-term debt, including current portion of long-term debt, net 121.70 Prepaid expenses and other current assets 224.90 Borrowings under revolving line of credit (See Note 19 “Subsequent Events”) 25.00 Assets held-for-sale — Total current assets 1,551.20 Total current liabilities 1,342.70 Property and equipment, net 201.20 Operating lease right-of-use assets 662.10 Long-term debt, net 216.00 Deferred income taxes — Operating lease liabilities 456.70 Other long-term liabilities 20.50 Long-term restricted cash 16.50 Total liabilities 2,035.90 Other noncurrent assets 41.60 Commitments and contingencies (Note 13) Total assets 2472.6 Stockholders’ equity: Class A common stock — $.001 par value; authorized 300.0 shares; 65.3 and 64.3 shares issued and outstanding, respectively 0.10 Additional paid-in capital 11.00 Accumulated other comprehensive loss (49.30) Retained earnings 474.90 Total stockholders' equity 436.70 Total liabilities and stockholders’ equity 2472.6 2. Use data from the table below to answer this question: Day 0 Day 1 Price # shares Price # shares Stock A 9 17,000 7 17,000 B 18 23,000 10 23,000 C 87 9,000 135 9,000 D 42 12,000 60 12,000 Note: the columns, #shares, on day 0 and day 1 indicate the total share outstanding for each stock. Suppose we want to construct indices using all four stocks above, and we choose the divisor on day 0 to be 1. a. Calculate the index level for price-weighted, value-weighted, and equal-weighted indices at day 0. (18) b. Calculate the index level for price-weighted, value-weighted, and equal-weighted indices at day 1. (18) c. Calculate the return of each index by the end of day 1. (9) d. After the market is close by the end of day 1, company C announces a 2.5-1 stock split, will there be any influence on each index? Explain. (18) 3. You sold short 200 shares of common stock at $60 per share. The initial margin is 60%. What is your initial investment? (9) 4. You purchased 100 shares of IBM common stock on margin at $70 per share. Assume the initial margin is 50%, and the maintenance margin is 30%. Below what stock price level would you get a margin call? Assume the stock pays no dividend; ignore interest on margin. (15) 5. You purchased 100 shares of common stock on margin at $45 per share. Assume the initial margin is 50%, and the stock pays no dividend. What would the maintenance margin be if a margin call is made at a stock price of $30? Ignore interest on margin.(15)