Assignments for week 4

Week 4 Quiz—Multiple choice (5 Problems). Highlight the correct answer with the marker and submit the document for scoring by the instructor.

#1. John Smith purchased 100 shares of XYZ stock at $40 a share. One year later, he sold the stock for $50 a share. He paid a broker a $32 commission when they purchased the stock and a $40 commission when they sold the stock. During the 12-month period he owned the stock, XYZ paid dividends that totaled $1. Calculate the Smith’s total return for this investment.

a. 30.3%

b. 22.7%

c. 32.7%

d. 25.5%

#2. As a stockholder of ABC, you receive its annual report. In the financial statements, the firm reported after-tax earnings of $5,200,000 and has issued 1,600,000 shares of common stock. The stock is currently selling for $36 a share.  What is the earnings per share for ABC?

a. $2.25/share

b. $0.29/share

c. $3.25/share

d. $0.70/share

#3. According to the “rule of 72,” a $2,000 investment earning 6% per year will double in

a. 3 years

b. 12 years

c. 8 years

d. 6 years

#4. Jane invested $52,000 in the Victorius Social Responsibility Fund. The management fee for this fund is 0.80 percent (ie, 0.8%) of the total asset value. Calculate the management fee Jane pays per year for this fund.

a. $416

b. 41,600

c. 41.60

d. 4,160

#5. Which type of fund can sell at a discount or premium to the net asset value?

a. Mutual Fund

b. Exchange Traded Fund

c. Closed End Fund

d. Money Market Fund