You purchase 300 shares of Internet Dream at $40 per share. You borrow $4,000 from your broker to help you pay for the purchase. The interest rate on the loan is 7%.

a) What is the margin in your account when you first purchase the stock?

b) If the share price falls to $35 after six months, what is the remaining margin in your account?

c) If the maintenance margin requirement is 30%, will you receive a margin call?

d) What is the rate of return on your investment?