# MartensLA10 - Preferred Stock Common Stock A mutual fund is...

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1. Define the basic terms used with annuities. Ordinary annuity: annuity in which payments are made at the end of each period. Payment period: The time between payments. Term of the annuity: the time from the first payment through the last payment. Interest calculations for annuities are made using compound interest. 2. Give one example for finding the amount of annuity. Amount = Payment x Number from amount of an annuity table. Consider annuity of \$5000 at the end of each year for 5 years at 6% compounded annually from amount annuity table -- 5.63709 Amount = \$5000 x 5.63709 = \$28185.45 3. For the same example you used in problem #2 find the amount of an Annuity Due. 28185.45*6.97532=29876.6 29876.6-(5000*(1*5)) = 4876.6 4. Define the types of stocks. What is a Mutual Fund?

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Unformatted text preview: Preferred Stock Common Stock A mutual fund is a sample of stocks that many investors invest their money into mutually. The fund is then managed by an expert. By purchasing a share in a mutual fund you are purchasing a part of a share in many different stocks. 5. What is the PE ratio? What is the formula for finding the PE ration? Price-Earnings Ratio. PE Ratio = Closing Price per share/Annual net income per share 6. Summarize the basic concepts of bonds. Bonds are legally binding promises to repay borrowed money at a specific date in the future. Corporations commonly pay interest on each bond each year. Unlike shareholders, bondholders do not own part of the corporation....
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## This note was uploaded on 12/30/2009 for the course MATH 1220 taught by Professor Roarty during the Spring '09 term at Metropolitan Community College- Omaha.

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MartensLA10 - Preferred Stock Common Stock A mutual fund is...

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