Series 65 Unit 22 Exam Questions

An investor owns a common stock that has been paying a dividend at an annual rate of $2.00. If the investor buys 100 shares of the stock at $50 and sells it 3 months later for $52, the approximate annualized rate of return is (22.Q1.12)

20%

A customer purchases stock for $40 per share and holds it for 1 year, selling it for $50 per share exactly 12 months after the date of purchase. Four quarterly qualifying dividends of $.50 were paid during the year. If the customer's tax bracket is 30%, what is the after-tax rate of return? (22.Q1.4)

21.75%

This is the performance of your portfolio over the previous 4 years: Year 1 - 10% Year 2 - 45% Year 3 + 20% Year 4 + 35% In order for the portfolio to be equal to the starting investment, the return in Year 5 must be nearest to (22.Q1.20)

25%

A hedge fund with a 2-plus-20% fee structure has equal probabilities of a 10% loss or a 30% gain in its first year. The probable return to an investor in the fund for the first year is closest to (22.Q1.15)

5.2%

What is the total return on a 1-year, newly issued (365 days to maturity) zero-coupon bond priced at 950? (22.Q1.2)

5.26%

An agent making a sales presentation to a client about a mutual fund's historical return is required to explain to the client the difference between the fund's (22.Q1.17)

current yield and total return

The Sharpe ratio measures a stock's (22.Q.19)

excess return earned compared to its total risk.

The yield to maturity of a bond represents the bond's (22.Q1.13)

internal rate of return (IRR)

The real interest rate of a fixed income investment is (22.Q.16)

the interest earned after inflation