Repeat Problems 2 and 3 assuming the initial margin requirement is 70 percent. Does this suggest a

Question:

Repeat Problems 2 and 3 assuming the initial margin requirement is 70 percent. Does this suggest a relationship between the initial margin and returns?

Data From Problem 2 and 3

In Problem 2, suppose you sell the stock at a price of $62. What is your return? What would your return have been had you purchased the stock without margin? What if the stock price is $46 when you sell the stock?