Question 1

You purchase a stock at the beginning of the year for $76.20 a share. Your total return for the year was 12.6 percent and the dividend yield was 3.2 percent. What was the price of the stock at the end of the year?

		$69.65
		$74.07
		$83.36
		$85.80
		$89.22

4 points

Question 2

An asset has an arithmetic average return of 12 percent, a geometric average return of 9.6 percent, and a standard deviation of 22 percent. What range of returns would you expect to see 95 percent of the time?

		-54.0 to +78.0 percent
		-34.4 to +53.6 percent
		-32.0 to +56.0 percent
		-12.4 to +31.6 percent
		-10.0 to +34.0 percent

3 points

Question 3

A stock had returns of 11, 14, -6, and 7 percent over the past four years, respectively. What was the average geometric return?

		6.21 percent
		6.50 percent
		8.01 percent
		8.37 percent
		9.45 percent

3 points

Question 4

Terry recently purchased 200 shares of Magna Corp. stock for $36.50 a share. His broker required a cash payment of $6,570, plus trading costs, for the purchase. What was the initial margin requirement on this particular stock?

		70 percent
		75 percent
		80 percent
		90 percent
		100 percent

3 points

Question 5

Three months ago, you purchased 700 shares of a stock for $22 a share. Today, you sold those shares for $24 a share. What was your annualized rate of return on this investment?

		9.09 percent
		19.01 percent
		36.36 percent
		38.80 percent
		41.63 percent

3 points

Question 6

Casper thought that ACAP stock was ready to decline so he short sold 600 shares at $22 a share on margin. The initial margin was 60 percent and the maintenance margin is 40 percent. What is the highest the stock price can go before he receives a margin call?

		$23.08
		$24.27
		$25.14
		$26.11
		$27.47

3 points

Question 7

A stock sells for $12.95 a share and has a required return of 13.5 percent. Dividends are paid annually and increase at a constant 3 percent each year. What is the amount of the last dividend paid?

		$1.22
		$1.28
		$1.32
		$1.36
		$1.40

3 points

Question 8

Naples Vacation Rentals has 60,000 shares of stock outstanding at a market price of $29.28 per share and a book value of $17.27 a share. The firm has earnings per share of $2.44, a dividend payout ratio of .35, and a P/E ratio of 12. What is the firm's sustainable rate of growth?

		8.88 percent
		9.18 percent
		11.11 percent
		12.57 percent
		14.13 percent

3 points

Question 9

Hill's Country Fresh Eggs is a relatively young firm which just paid their first annual dividend of $.40 a share. Management projects dividend increases of 15 percent per year for five years followed by a constant growth rate of 3 percent annually. What is this stock worth today if the applicable discount rate is 11 percent?

		$8.37
		$9.08
		$9.42
		$11.76
		$12.45

3 points

Question 10

Ameth Growers has historically had a P/E ratio of 21.4. This ratio is considered a good estimate of the future ratio. The firm currently has EPS of $2.34. These earnings are expected to increase by 3.4 percent next year. What is the expected price of this stock one year from now?

		$45.54
		$48.43
		$50.25
		$51.78
		$53.79