unit 3&4

Which of the following statements regarding IRAs are CORRECT? ( pick 2) 1 One may have both a Roth IRA and a Traditional IRA, contributing the maximum to each one. 2 One may have both a Roth IRA and a Roth 401(k) contributing the maximum to each one. 3 Both traditional IRAs and Roth 401(k) plans have RMDs at age 70 ½. 4 If one is a participant in a Roth 401(k) plan, the earnings limits are waived for opening a Roth IRA.

2 & 3.

it is generally accepted that a secuirty will vary within 1 standard deviation about ____ of the time and within 2 standard deviations about ____ of the time

2/3 and 95%

how old must an employee be to qualify for SEP IRA

21

hardship withdrawals are permitted from...

401K, nOT IRA

what college saving plan give the most control? -ugma -529 -esa -utma

529

what is the most common risk-free rate (what is it paid by)

90-day us treasury bills

demand deposit

In deposit terminology, the term demand deposit account, (sometimes referred to as DDA), refers to a type of account held at banks and financial institutions that may be withdrawn at any time by the customer. The majority of such demand deposit accounts are checking and savings accounts. With the immediate availability of funds, it is appropriate to look at these as short-term money and, as is usually the case, the shorter the length, the lower the return.

GHI currently has earnings of $4 and pays a $0.50 quarterly dividend. If GHI's market price is $40, the current yield is

The quarterly dividend is $0.50, so the annual dividend is $2; $2 ÷ $40 market price = 5% current yield.

Among the ways in which UGMA accounts differ from UTMA accounts is that:

Unlike UGMA accounts where the assets are always transferred when the minor reaches the age of majority in that state, UTMA accounts may extend the transfer period first established by the Uniform Gift to Minors Act to as late as age 25. In neither case are the gifts revocable and, upon death of the minor, assets in either account go to the deceased's estate.

what is the most important factor to performance of a portfolio

asset allocation

sharpe ratio

avg annual return of a security minus the rf rate divided by the security's standard deviation

working capital is calculated by

current assets-current liabilites

what is the most common way to reduce unsystematic risk

diversification

book value

equity

PE analysis is used by what kind of analyst

fundamental

whats the only way to mitiage systematic risk

hedging

participants in SEPs are vested after...?

immediately

take out any __ for book value per sahre

intangible assets, par value, preferred stock

Mr. Hawkins sets up a revocable trust for the benefit of his adult daughter, Madeleine. His wife may draw from it only if she needs to. Income on the trust will be taxed to:

mr hawkins bc donor

can companies use their qualified plan assets to finance their business operations?

no

building permits are

predictors of the level of business activity

capital needs analysis doesn't need to know

projected market volatility bc death benefits remain constant.

200day moving average is used by what kind of analyst

technical

quick ratio

the quick ratio, sometimes called the acid-test ratio, is computed by taking a company's current assets minus the inventory and then dividing that by the current liabilities.

The issuance of a debenture by a company would have an immediate effect on which of the following balance sheet items? (select 3) Total assets Total liabilities Working capital Shareholders' equity

total assets total liabilites working capital

real rate of return calculation

total return (appreciation plus income adjusted for the inflation rate expressed by CPI). not included: marginal tax bracket

are life insurance proceeds taxed

usually free from income taxes and will be free from estate taxes