Mandy purchases 4,000 shares of EHM stock on margin at $80 per share. The initial margin requirement on a stock purchase is 60%. The interest rate is 2% per week.

1. How much is the margin in Mandys account when she first purchases EHM stock? (2 marks)

2. What is the remaining margin in the account if EHM share price falls to $65 per share after a week? Will she receive a margin call if the maintenance margin requirement is 30%? (6 marks)

3. Determine the rate of return on her investment. (3 marks)