Q.2. How do margin trades magnify both the upside potential and downside risk of an investment portfolio? 2 Q.3. a. Dee Trader opens a brokerage account and purchases 300 shares of Internet Dreams at $40 per share. She borrows $4,000 from her broker to help pay for the purchase. The interest rate on the loan is 8%. i. What is the margin in Dee's account when she first purchases the stock? ii. If the share price falls to $30 per share by the end of the year, what is the remaining margin in her account? If the maintenance margin requirement is 30%, will she receive a margin call? ili. What is the rate of return on her investment? b. Old Economy Traders opened an account to short sell 1,000 shares of Internet Dreams from the previous problem. The initial margin requirement was 50%. (The margin account pays no interest.) A year later, the price of Internet Dreams has risen from $40 to $50, and the stock has paid a dividend of $2 per share. 1. What is the remaining margin in the account? ii. If the maintenance margin requirement is 30%, will Old Economy receive a margin call? iii. What is the rate of return on the investment