Investment

2-BLOCK

141.	You bought a stock for $21.2 at time t; at time t+1, the stock paid a dividend of $1.34 and you sold the stock for $24.6. What is your realized return on your investment? HPR= 1.34+(24.6-21.2)/21.2 HPR=4.74/21.2 HPR=0.2235
142.	You purchased 1,300 shares of the New Fund at a price of $10 per share at the beginning of the year. You paid a front-end load of 2%. The securities in which the fund invests increase in value by 12% during the year. The fund's expense ratio is 1.5%. What is your rate of return on the fund if you sell your shares at the end of the year? Answer: 1300*10/(1-0.02)=13000/0.98=13265 13000/(1.12-0.015)=13000/1.105=11764 (11764-13265)/13265=-0.113*100%=-11.3%
143.	Suppose you hold a particular investment for 5 months. You calculate that your holding period return is 5 percent. What is your annualized return?
144.	An investor is in a 30% combined federal plus state tax bracket. If corporate bonds offer 9% yields, what must municipals offer for the investor to prefer them to corporate bonds? 0.09*(1-0.30)=0.063*100%=6.3%
145.	A T-bill with face value $10,000 and 87 days to maturity is selling at a bank discount ask yield of 3.4%. What is the price of the bill? Price = $9,917.83 Equivalent yield = 4.23% Price= $10,000 x (1-.008217) = $9,917.83 Equivalent yield= 10,000 / 9,9917.83 = 1.0083 x 365/87 = 4.23%
146.	Both a call and a put currently are traded on stock XYZ; both have strike prices of $50 and maturities of six months. What will be the profit or loss to an investor who buys the call for $4 if stock prices in six months are $40;
147.	Suppose you short-sell 100 shares of IBX, now selling at $200 per share. a. What is your maximum possible loss? b. What happens to the maximum loss if you simultaneously place a stop-buy order at $210?
148.	Dée Trader opens a brokerage account and purchases 300 shares of Internet Dreams at $40 per share. She borrows $4,000 from her broker to help pay for the purchase. The interest rate on the loan is 8%. What is the margin in Dée’s account when she first purchases the stock?