1. On Jan 1, you sold short 400 shares of Microsoft at $60 per share. You post $12,000 to the margin account. On April 1, you received a margin call on this trade. Assume the minimum margin requirement is 25% and you receive a margin call. What amount must you top-up to restore to the initial margin requirement?

2. You purchased 500 shares of common stock at $8 per share on margin. The initial margin is 50%, and the stock pays no dividend. Interest rate is 5% per year. Your rate of return would be __________ if you sell the stock at $12 per share in one year.