Problem 2 - Buying on Margin: (20 marks) 1. 100 shares are purchased on the margin at the beginning of the year for $40 per share. The initial margin requirement was 50%. Interest of 10% was paid on the margin loan. A dividend of $1 per share is received. Calculate the annual return if: 2. The stock are sold for $50 and $30 per share at the end of the year (8 marks) 3. Calculate the return for (a) and (b) if the purchase had been made using cash instead of on the margin. (5 marks) 4. If maintenance margin is 35%, how much can the stock falls before a margin call (5 marks) 5. Why do investors involve in margin trading? (2 marks)