1st Exam Practice

1st Exam Practice - First Exam BUS 422 Dr. Jones NAME_ Fill...

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First Exam BUS 422 Dr. Jones NAME___________________________________________ Fill in the Blanks: (3 points each) Use 4 decimal places to the right of decimal to calculate the first 3 problems. _____________ 1. The geometric mean for inflation for 1920-2003 was 2.57%, and for the S&P 500 stocks was 10.23%. The inflation-adjusted geometric mean for common stocks was? ______________2. Treasury bills have a geometric mean of 3.91% for the period 1920-2003. The cumulative wealth for Treasury bills was ? ______________3. Given the information in the previous two problems, what was the equity risk premium _____________4. IPOs are considered transactions in the _________________ market. _____________5. If inflation averages 3.6% on a compound annual basis, the purchasing power of money will be cut in half in approximately _________ years. ____________ 6. The divisor for the DJIA is .12495. On Sept. 20 the Dow goes up 80 points. One of the Dow stocks went up $5.50 on that day. What % of the rise in the Dow on 9/20 was accounted for by the movement in this one stock? Use two decimal places for this problem. _____________7. An investor buys 100 shares of Bino at $52 per share on margin. The stock goes to $64 per share and the investor sells. Ignoring all costs, the percentage return on the investor’s equity is _____________8. The geometric mean for corporate bonds for the period 1920-2005 , assuming a Cumulative Wealth of $153.39, will be (round answer to 2 decimals) ? _____________9. You buy a German stock at 38 Euros, and it closes one year later at 47 Euros. You collect dividends of 2 Euros. The dollar depreciates against the Euro by 5%. Your dollar-denominated rate of return for the year is ? ______________10. Assume an investor sells short 250 shares of stock at $65 per share. At what price must
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1st Exam Practice - First Exam BUS 422 Dr. Jones NAME_ Fill...

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