An investor opens her first brokerage account, and purchases 800 shares of a stock at $30 per share. She borrows $11,000 from her broker to help pay for the purchase. The interest rate of the loan is 4.5%.

1. What is the initial margin in her account when she first purchases the stock?

2. 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 30%, will she receive a margin call?

3. What is the rate of return on the investment if she sells the shares at the end of the year at $20 per share?