Say you own an asset that had a total return last year of 13.9 %. If the inflation rate last year was 3.5 %, what was your real return?(Round answers to 4 decimal places, round intermediate calculations to 5 decimal places)

Real Return

2.

You purchase a bond with a coupon rate of 5.7 % and a clean price of $1034. If the next semiannual coupon payment is due in 3 months, what is the invoice (dirty) price?(Round answers to 2 decimal places, round intermediate calculations to 5 decimal places)

Dirty Price

3.

The newspaper reported last week that Lowery Enterprises earned $23 thousand this year. The report also stated that the firm's return on equity is 12.9 %. Lowery retains 54 % of its earnings. What is the firm's earnings growth rate?(Round answer to 4 decimal places, round intermediate calculations to 5 decimal places)

What will next year's earnings be?(Round answer to 2 decimal places, round intermediate calculations to 5 decimal places. When using previous answers, use the rounded answer as it was given in the answer box)

Earnings Growth Rate

Next Year's Earnings

4.

Hughes Co. is growing quickly. Dividends are expected to grow at a 29.8 % rate for the next three years, with the growth rate falling off to a constant 5.3 % thereafter. If the required return is 10.9 % and the company just paid a $2.5 dividend, what is the current share price?(Round answer to 2 decimal places, round intermediate calculations to 5 decimal places)

Current Share Price

5.

You wrote 5 call option contracts on XYZ stock with a strike price of $40 and an option premium of $1.7. What is your net gain or loss on this investment if the price of XYZ is $35.34 on the option expiration date?(Round answer to 2 decimal places, round intermediate calculations to 5 decimal places)

Profit/Loss

6.

You purchased 8 ABC 30 call option contracts at a quoted price of $0.79. What is your net gain or loss on this investment if the price of ABC is $26.35 on the option expiration date?(Round answer to 2 decimal places, round intermediate calculations to 5 decimal places)

Profit/Loss

7.

Three months ago, you purchased a put option on Nole stock with a strike price of $60 and an option price of $1.8. The option expires today when the value of Nole stock is $56.81 Ignoring trading costs and taxes, what is your total profit or loss on your investment?(Round answer to 2 decimal places, round intermediate calculations to 5 decimal places)

Profit/Loss

8.

An investor purchases a long call at a price of $2.65. The strike price is $35. If the current stock price is $29.76, what is the break-even point for the investor?(Round answer to 2 decimal places, round intermediate calculations to 5 decimal places)

Break-Even

9.

The price of Ervin Corp. stock will either be $68 or $86 at the end of the year. Call options are available with one year until expiration. T-bills currently yield 2.33 %. Suppose the current price of Ervin stock is $75.(Round answer to 2 decimal places, round intermediate calculations to 5 decimal places)

a) What is the value of the call option if the strike price is $75 per share?

b) What if the strike price is $55 per share?

a) Call Premium

b) Call Premium

10.

A stock is currently selling for $35 per share. A call option with an exercise price of $45 sells for $3.02 and expires in three months. If the risk-free rate of interest is 3.9 % per year, compounded continuously, what is the price of a put option with the same exercise price and time until expiration?(Round answer to 2 decimal places, do not round the number e in your calculation)

Put Premium