exam1D.ch1ch2ch2Ach5partial

# exam1D.ch1ch2ch2Ach5partial - Name _ Peoplesoft Number _...

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Name __________________________________ Peoplesoft Number __________________________________ University of Houston C. T. Bauer College of Business Finance 3332 Fall, 2010 Exam 1D To receive full credit: Clearly indicate your answer Financial functions may be used only for finding annuity factors All inputs to find annuity factor must be shown Carry all decimals, rounding only final answer Decimal places should be rounded to four places (two in percent form) Currency answers rounded to the nearest cent, where applicable Include applicable units (\$, %, etc.) on answers 1. A put option is a financial security that gives the holder of the option the ______________ to ____________ a specified asset at a specified strike price on or before a specified exercise date. (8) 2. Last year Indigo purchased 600 shares of stock for \$50 per share, and over the last year, she received four quarterly dividend checks of \$750.00 each. She just sold the stock for \$48 per share, but she expects the stock price to fall to \$40 over the next year. Calculate Indigo’s realized holding period return. (8) 3. Last year, BBB, Incorporated had operating income of \$1.5 million, paid \$500,000 in dividends to its stockholders, and paid \$200,000 in interest to its creditors. During the year, the firm also repaid a bank loan of \$450,000 and received preferred dividends of \$60,000. Assuming a marginal and average

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## This note was uploaded on 02/13/2011 for the course FINA 3332 taught by Professor Darlachisholm during the Spring '08 term at University of Houston.

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exam1D.ch1ch2ch2Ach5partial - Name _ Peoplesoft Number _...

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