Unit 4 Attempt 3

A company's board of directors approved a 2-for-1 stock split. If you owned 240 shares before the stock split at $27.38 per share, how many shares would you own after the split?

480

You are currently paying $175 in interest on your credit cards annually. If, instead of paying interest, you saved this amount every year, how much would you accumulate in a tax-deferred account earning 9% over the next 20 years?

8953.02

Bonds with both a Moody's rating of A and a Standard & Poor's rating of A have a higher probability of repayment than any other bond.

False

Some checking accounts pay a higher rate of interest than some savings accounts.

False

The ask price is the highest price someone is willing to pay for a security.

False

What is the total amount you will have to repay for your $11,000 student loan if the interest rate is 3% APR and you pay equal monthly payments over the 10 year life of the loan?

N = 10 PV = 11000 I/Y = 3 PMT = 0 14783.08 WRONG

Personal financial planning includes the following processes:

- determining your current financial situation. - developing your financial goals. - reviewing and revising your financial plan. - identifying and evaluating alternative courses of action.

If you earned a 3.3% return on your savings with a 25% tax rate, what is your after-tax rate of return?

.033 * (1-.25) .0248

You purchased 100 shares of stock for a share price of $16.16. You sold the stock two years later for a share price of $18.25. You also received total dividend payments of $1.92 per share. How much money did you collect in dividends total?

1.92*100 = 192

You purchased 100 shares of stock for a share price of $15.00. You sold the stock two years later for a share price of $19.73. You also received total dividend payments of $1.95 per share. What was your dividend yield?

1.95*100=195 15.00*100=1500 195/1500=.13

You invested $10000 of your own money and borrowed $10000 from your broker to purchase shares of a company trading at a share price of $2. How many shares can you purchase?

10000

You own shares of a company that reported after-tax earnings of $16 million and has issued 10 million shares of stock. The company's stock price is $18.31 per share. Calculate the company's earnings per share.

16 mill / 10 mill = 1.60

You purchased 100 shares of stock for a share price of $15.78. You sold the stock two years later for a share price of $18.97. You also received total dividend payments of $0.70 per share. What was your capital gain?

= (18.97*100)-(15.78*100) = 319

A stock with a high beta has a share price that remains unchanged when the market falls.

False

In an attempt to have funds for a down payment in five years, you plan to save $8475 each year for the next five years. With an interest rate on your savings of 1% APR, how much will you have in your account after five years?

N = 60 PV = 0 I/Y = 1 PMT = 8475 692150.45 WRONG

A bear market is a period of rising stock prices.

True

A certificate of deposit (CD) is a savings plan requiring that a certain amount be left on deposit for a stated time period to earn a specific rate of return.

True

A market order is a request to buy or sell a stock at the current market price.

True

The Federal Deposit Insurance Corporate (FDIC) insures up to $250,000 per depositor per insured U.S. financial institution against loss of money due to the failure of the insured institution.

True

When you cosign on a loan, you agree to be responsible for all loan payments if the other party fails to make them.

True