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2. Margin Trading (slide 24) An investor opens her first brokerage account, and purchases 500 shares of Cisco shares at $24 per share. She borrows

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2. Margin Trading (slide 24) An investor opens her first brokerage account, and purchases 500 shares of Cisco shares at $24 per share. She borrows S5,000 from her broker to help pay for the purchase. The interest rate of the loan is 3.5%. o What is the initial margin in her account when she first purchases the stock? b) If the price falls to $20 per share by the end of the year, what is the remaining margin in her account? If the maintenance margin requirement is 35%, will she receive a margin call? c) What is the rate of return on the investment if she sells the shares at the end of the year at $20 per share

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