Finance homework help

Three years ago, Emily bought 200 shares of HQ at $27.00 per share. HQ shares have risen to $57.50 per share. If the stock continues to rise, she wants to hold it, but she fears that the price could fall quickly and she will lose most of her profit. Which of the following decisions would be best?

A. Place a limit order to sell at $60.00.

B. Place a stop-limit order at $55.00.

C. Place a stop-loss order at $27.00

D. Place a stop-loss order at $55.00.

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Assume that the S&P 500 composite stock index closes at 1300. This means that

A. the average stock in the index is selling for $130.00.

B. an investor would have to pay $1,300 to purchase one share of each of the stocks represented in the index.

C. The average value of a company reflected in the Index is up 30% from when the Index was at 1000.

D. the share prices of the stocks in the index have risen 13 times since the 1941-1943 base period.

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Consider the following 3 stocks: Stock A price =40 no. of shares = 200: Stock B Price = 40 no. of shares = 500 Stock C Price = 10 no. of shares = 600 Assume a value weighted index for the stock today is at 490. What would the index be if stock Bsplit 2 for 1 and stock C split 4 for 1?

A. 265

B. 355

C. 430

D. 490

E. 1000

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Ryan places a good-'til-canceled limit order to sell 300 shares of KM at $18 a share. When his order reaches the trading floor, KM is trading at $18.20. Which of the following statements is true concerning Roy's order?

A. The trade will not be executed and will be immediately cancelled.

B. The specialist will record the order in the order book and execute the trade as soon as the price hits $18.00.

C. The brokerage firm will sell the 300 shares at $18.20 and keep the additional $0.20 as a commission.

D. The order will be executed at $18.20 with the proceeds credited to Roy's account.

Which of the following statements is true?

A. The holding period return is especially useful comparing investments with unequal holding periods.

B. It is not possible for the nominal risk-free rate of return to be lower than the rate of inflation.

C. One reason that the holding period return should not be used to compare long-term investments is that it does not consider the time value of money.

D. The return that fully compensates for the risk of an investment is called the risk-free rate of return.

Question 17 of 25

4.0 Points

Josh purchased 100 shares of XOM for $76.63 per share at the beginning of 2007. He received dividends per share of $1.37 (2007), $1.55 (2008), $1.66 (2009), $1.74 (2010), $1.85 (2011). At the end of 2011, just after receiving the last dividend, he sold the stock for $84.76. What was his average annual rate of return form both dividends and capital gains? (Hint: compute the IRR, assume that all dividends were received at the end of the year.)

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The expected rate of return and standard deviations, respectively for four stocks are given below: ABC 9%, 3% CDE 11%, 9% FGH 12%, 8% IJK 14%, 10% Which stock is clearly least desirable?

A. ABC

B. CDE

C. FGH

D. IJK

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The markets in general are paying a 2% real rate of return. Inflation is expected to be 3%. ABC stock commands a 6% risk premium. What is the expected rate of return on ABC stock?

A. 2%
B. 5%
C. 8%
D. 11%