Sample Quiz #1

Sample Quiz #1 - Finance 355: Investments Sample Quiz 1 1....

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1 Finance 355: Investments Sample Quiz 1 1. A stock sold for $38.20 at the beginning of the year. The end of year stock price was $40.11. What was the amount of the annual dividend if the total return for the year was 9.712 percent? a. $1.50 b. $1.54 c. $1.60 d. $1.76 e. $1.80 2. Which of the following are classified as derivative securities? I. preferred stock II. options III. money market instruments IV. futures a. I and II only b. I and IV only c. II and IV only d. I, II, and IV only e. II, III, and IV only 3. Jill purchased 100 shares of ABC stock at $22 a share. On the same day, her twin sister Jan also purchased 100 shares of ABC stock at $22 a share. Jill paid cash for her purchase while Jan used margin. The broker has a 70 percent initial margin and a 35 percent maintenance margin on this stock. Both Jill and Jan sold their shares after 7 months at a price of $26 a share. The stock pays no dividends. Jill had a holding period percentage return of _____ percent as compared to Jan’s _____ percent return. Ignore margin interest and trading costs. a. 18.18; 18.18 b. 18.18; 25.97 c. 18.18; 30.30 d. 19.99; 25.97 e. 19.99; 30.30 4. A stock has a return of 14.7 percent, and the risk-free rate is 5.2 percent. What is the risk premium for this stock? a. 9.03 percent b. 9.27 percent c. 9.50 percent d. 9.66 percent e. 9.70 percent
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2 5. Which of the following is the least likely advantage of mutual fund investing? a.
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Sample Quiz #1 - Finance 355: Investments Sample Quiz 1 1....

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