A stock sells for $15 per share. You purchase 100 shares for $15 a share (i.e., for $1,500), and after a year the price rises to $18.75 a) What will be the percentage return on your investment if you...

A stock sells for $15 per share. You purchase 100 shares for $15 a share (i.e., for $1,500), and
after a year the price rises to $18.75

a) What will be the percentage return on your investment if
you bought the stock on margin and the margin requirement was 65 percent? (Ignore commissions, dividends, and interest expense.)

b) Rather than selling for $18.75, determine the percentage return on your investment if the price of the stock falls to $12.30

Based on your answers to both questions, what generalization on the use of margin
accounts can be inferred?