Maximum margin example

1. p>=$2: 50% margin loan (brokerage can lend money which equals 50% of security)
2. $1.75<=P<$2: 40% margin loan
3. $1.50<=P<$1.75: 20% Margin loan
4. P<$1.50: No margin loan

Client buys 1,000 shares of ABC on margin at $1.95

(1) If stock price rises to $3. How much money does the client make? (2 marks)

(2) If the stock price falls to $1.8. How much money does the client lose? Dose it trigger a margin call? How much money should the client put into the client if there is a margin call? (2 marks for each question)