QUESTION 1: Seven years ago, Morgan purchased 50 shares of PQR Company at $15.25 per share. Each year, PQR shares would pay $0.25 in dividends. Today, Morgan sold these shares for $18.75 each.

1.How much ($ amount) did Morgan make in capital gains per share?

a.$2.50

b.$3.50

c.$2.75

d.$3.75

e.None of the Above

2.How much (percent return) did Morgan make in capital gains per share?

a.23.06%

b.16.73%

c.25.10%

d.22.95%

e.None of the Above

3.How much in dividends ($ amount) did each PQR share pay during the seven-year period?

a.$2.00

b.$1.75

c.$1.80

d.$3.00

e.None of the Above

4.What would be the Simple Holding Period Return (HPR) per share during this six-year period?

a.35.31%

b.27.55%

c.34.43%

d.20.0%

e.None of the Above

5.What would be Compound HPR per share during this six-year period?

a.4.04%

b.3.74%

c.4.32%

d.3.44%

e.None of the Above

QUESTION 2: On January 4th, 2017, Sawyer purchased a corporate bond of FGH Inc. at its market price of $1015. The bond pays a 3.75 percent coupon rate, which is paid out semi-annually, based on its face value of $1,000. The bond will mature on July 5th, 2024.

1.What would be dollar amount of each semi-annual coupon?

a.$18.50

b.$16.75

c.$18.75

d.$21.25

e.None of the Above

2.Based on the purchase price, what would be the current yield that Sawyer would be receiving on these bonds?

a.4.19%

b.3.50%

c.4.02%

d.3.69%

e.None of the Above

3.What is the current yield to maturity that Sawyer would be receiving?

a.3.93%

b.3.52%

c.3.23%

d.4.02%

e.None of the Above

QUESTION 3: On April 1st, 2018, Yugo purchased a corporate bond of IJK Limited for its face value of $1,000. The bond pays a 3.5 percent coupon rate, which are paid semi-annually, and it will be maturing on April 1st, 2028. On April 1st, 2020, similar bonds are paying a coupon rate of 2.75 percent, and Yugo plans to sell their bond.

1.What would be the dollar amount of each semi-annual coupon, Yugo would receive?

a.$18.75

b.$16.50

c.$20.00

d.$17.50

e.None of the Above

2.What would be the market price of the IJK bonds on April 1st, 2020, based on the market coupon rate?

a.$982.86

b.$1,053.53

c.$1,072.01

d.$995.15

e.None of the Above

3.What would be the capital gains/loss ($ dollar amount) would Yugo receive from selling the IJK bond?

a.$72.10

b.$38.00

c.$17.14

d.$52.53

e.None of the Above

4.What would be the capital gains/loss (% percent return) would Yugo receive from selling the IJK bond?

a.7.21%

b.3.80%

c.5.35%

d.1.71%

e.None of the Above