To calculate Dave’s equity if the price of KNIGHT had increased to $15.00, we need to determine the value of his remaining shares in KNIGHT and add it to his cash balance.

Remaining shares in KNIGHT = 13,000 - 9,000 = 4,000 shares Value of remaining shares = 4,000 shares * $15.00 = $60,000

Equity = Cash + Value of remaining shares Equity = -$56,500 + $60,000 Equity = $3,500

Dave’s equity would be $3,500 if the price of KNIGHT had increased to $15.00.

Dave had an alternative to selling 9,000 shares at $9.00. He could have used additional cash to meet the margin call and maintain his position. However, the case study does not provide information on whether Dave had additional cash available.

To calculate Dave’s total return as of the end of day on Wednesday, we need to consider the cash flows from buying and selling shares.

Cash flow from buying shares: 15,000 shares * $10.00 = -$150,000 7,000 shares * $12.50 = -$87,500 15,000 shares * $10.00 = -$150,000 7,000 shares * $12.50 = -$87,500

Cash flow from selling shares: 9,000 shares * $9.00 = $81,000

Total cash flow = (-$150,000) + (-$87,500) + (-$150,000) + (-$87,500) + $81,000 Total cash flow = -$394,000 + $81,000 Total cash flow = -$313,000

Total return = (Ending equity - Initial equity + Total cash flow) / Initial equity Total return = ($60,500 - $100,000 - $313,000) / $100,000 Total return = (-$352,500) / $100,000 Total return = -3.525 or -352.5%

Dave’s total return as of the end of day on Wednesday is -352.5%.