A trader opens a brokerage account, and purchases 300 shares of Internet Dreams at $40.00 per share. She borrows $4,000 from her broker to help pay for the purchase. The broker's call money rate on the loan is 4.00% annually.

1) What is the margin in the account when she first purchases the stock?

a) 64.65%

b) 65.69%

c) 66.67%

d) 67.64%

2) If the share price falls to $30.00 per share by the end of a year, what is the remaining margin in her account? (Don't forget to include the impact of the broker's call money rate.)

a) 58.86%

b) 57.24%

c) 55.33%

d) 53.78%

3) What is the rate of return on the margin trade?

a) -39.50%

b) -31.53%

c) -29.68%

d) -21.57%