1. You invested $1000 in a stock at the start of the year 2016. The return on your stock is 50% in year 2016; 50% in year 2017, and 33.3% in year 2018. What is the arithmetic average return per year? How much money do you have at the end of 2018?

   1. A) 0%; you have $1000

   2. B) 33.3%; you have $1333

   3. C) 33.3%; you have $1000

   4. D) 11.1%; you have $1000

   5. E) 11.1%; you have $1333

2. You sold short 300 shares of common stock at $55 per share. The initial margin is 60%. At what stock price (to the nearest whole dollar) would you receive a margin call if the maintenance margin is 35%?

3. You buy 300 shares of Qualitycorp for $30 per share and deposit initial margin of 50%. The next day Qualitycorp's price drops to $25 per share. What is your margin when the stock price is at $25?

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Use the following information for questions 5 and 6:

Your portfolio consists of the following three stocks:

Stock X Y Z

Start price $50

$40 $30

End price $30

$45 $50

Number of shares 100

200 300

.

.

5. The value-weighted return on your portfolio is A) 18.5% B) 22.7% C) 4.17%

D) 0% E) Impossible to determine

6. The equal-weighted return on your portfolio is

1. A) 5%

2. B) 13.1%

3. C) 39.2%

4. D) 0%

5. E) Impossible to determine

7. You want to buy 100 shares of Hotstock Inc. at the best available price as quickly as possible. You would most likely place a

1. A) stop-loss order

2. B) stop-buy order

3. C) limit-buy order

4. D) limit-sell order

5. E) market buy order

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8. You are a long-term investor. You plan to buy a mutual fund and hold it for 40 years. You would prefer which of the following?

   1. A) A mutual fund with a large front-end load and no expense ratio

   2. B) A mutual fund with no loads and a high expense ratio

9. Most actively managed mutual funds, when compared to a market index such as the S&P 500,

   1. A) Beat the market return in all years.

   2. B) Beat the market return in most years.

   3. C) Do not outperform the market.

   4. D) None of the above is a correct statement

10. A mutual fund has a portfolio currently worth $215 million. It has 10 million shares outstanding. The funds NAV per share equals .

    1. A) $21.50

    2. B) $2.15 billion

    3. C) $20.60

    4. D) $215 million

    5. E) $22.40

PLEASE GIVE EXPLANATIONS FOR THE ANSWERS