**Answer:**

The correct answer is **option (C).**

**Explanation:**

According to the scenario, the given data are as follows:

Purchase of common stock = 250 shares

Rate per share = $25

Initial margin = 65%

Sale rate per share = $32

So, we can calculate rate of return by using following method:

First we calculate total investment,

**Investment = Purchase of common stock × Rate per share × Initial margin**

= 250 × $25 × 65%

**= $4062.5**

As, initial margin is of 65%, it means there is 35% loan, then

**Loan amount = Purchase of common stock × Rate per share × Loan percentage**

= 250 × $25 × 35%

**= $2187.5**

Now, we calculate the sale value after paying the loan amount

**Sale value ( after paying loan ) = ** (**Purchase of common stock × Sales Rate per share) - Loan amount**

= (250 × $32) - $2187.5

**= $5812.5**

So, **Rate of return = (Sales price - Investment ) ÷ Investment**

= ($5812.5 - $4062.5) ÷ $4062.5

**= 43.08%**

**= 43% ( approx.)**

Hence, the rate of return is **43%.**