Data:

The investor buys 200 shares of one issue, which are sold at $80 at an initial margin of 60%. These shares pay an annual dividend of $1 per share, and a brokerage loan can be taken at 12% per annum.

Required:

1) Calculate the return on investment that the investor will receive in six months if the value of these shares rises to $104.

2) What will be the annual rate of return on investment?

3) How will the margin (the share of the investor's equity) change?