Last year you sold short 400 shares of stock selling at $87.79 per share. Six months later the stock had fallen to $52.48 per share. Over the six-month period, the company paid out two dividends of $1.07 per share. Your total commission cost for selling and buying the shares came to $133. Determine your profit or loss from these transactions. Your profit (or loss) from these transactions is $nothing. (Round to the nearest dollar.)

Jana just found out that she is going to receive an end-of-year bonus of $78,300. She is in the 35 percent marginal tax bracket. Calculate her income tax on this bonus. Now assume that instead of receiving a bonus, Jana receives the $78,300 as a long-term capital gain. What will be her tax? Which form of compensation offers Jana the best after-tax return? Would your calculation be different if the gain was short-term rather than long-term? Her income tax on this bonus is $nothing. (Round to the nearest dollar.)

After reading this chapter, it isn't surprising that you're becoming an investment wizard. With your newfound expertise, you purchase 100 shares of KSU Corporation for $35.65 per share. Assume the price goes up to $45.82 per share over the next 12 months and you receive a qualified dividend of $0.59 per share. What would be your total return on your KSU Corporation investment? Assuming you continue to hold the stock, calculate your after-tax return. How is your realized after-tax return different if you sell the stock? In both cases assume you are in the 25 percent federal marginal tax bracket and 15 percent long-term capital gains and qualified dividends tax bracket and there is no state income tax on investment income. Your total rate of return on your KSU Corporation investment is nothing%. (Round to two decimal places.)

You just learned that a blue chip company will issue a bond with a maturity of 100 years. The bond appears to be a good deal because it yields 9.62 percent. Assuming that the inflation rate stays at 2.78 percent, what is the bond's real rate of return today? If you are looking for a bond to purchase and hold for several years, will you buy this bond? Explain your answer in terms of future inflation projections and the length of the bond's maturity. Assuming that the inflation rate stays at 2.78 percent, what is the bond's real rate of return today? (Select the best answer below.) A. The bond's real rate of return is 6.84 percent. Only the most risk-tolerant investor would purchase this bond. If inflation were to increase, the value of this bond would increase. The dramatic increase in the value of the bond would be as a result of its sensitivity to changes in interest rates due to its long maturity. B. The bond's real rate of return is 7 percent. Only the most risk-tolerant investor would purchase this bond. If inflation were to increase, the value of this bond would decrease dramatically. The dramatic decrease in the value of the bond would be as a result of its sensitivity to changes in interest rates due to its long maturity. C. The bond's real rate of return is 6.84 percent. Only a long-term investor would purchase this bond. If inflation were to increase, the value of this bond would decrease. The dramatic decrease in the value of the bond would be as a result of its sensitivity to changes in interest rates due to its long maturity.

Arianna just made another fantastic investment: She purchased 400 shares in Great Gains Corporation for $21.78 per share. Yesterday the stock closed at $63.01 per share. In order to lock in her gains, she has decided to employ a stop-loss order. Assuming she set the order at $62.66, what is likely to happen? Why might this not be a wise decision? At what price would you recommend setting the stop-loss order? Why? In order to lock in her gains, she has decided to employ a stop-loss order. Assuming she set the order at $62.66: (Select the best answer below.) A. It is unlikely that the position will be sold as the stock fluctuates around its closing price. B. It is likely that the position will be sold as the stock fluctuates around its closing price. C. There is not enough information to answer this.

Harry and Harriet own 1,000 shares of AI Inc. in a brokerage account that is titled "Harry and Harriet, Tenancy-in-Common." Explain how the assets would be handled if Harry passed away. Would these scenarios be different if the account was titled "Harry and Harriet, Joint Tenancy with the Right of Survivorship"? If the brokerage account was titled "Harry and Harriet, Tenancy-in-Common"and Harry passed away: (Select the best answer below.) A. Harry's heirs would receive Harry's shares, not Harriet. B. Harriet would receive Harry's shares solely. C. Both Harry's heirs and Harriet would receive Harry's shares.

Last year you sold short 400 shares of stock selling at $87.79 per share. Six months later the stock had fallen to $52.48 per share. Over the six-month period, the company paid out two dividends of $1.07 per share. Your total commission cost for selling and buying the shares came to $133. Determine your profit or loss from these transactions. Your profit (or loss) from these transactions is $nothing. (Round to the nearest dollar.)