11) You believe that the stock of MoabBikes will soon fall from its current pric

Question

11) You believe that the stock of MoabBikes will soon fall from its current price of $25 per share. You short 1000 shares with your broker who has a 50% margin requirement. The price falls to $15 per share, but not before it pays a $5 dividend. Your commissions and other charges totaled $50. What was your total profit?
A) $5.00
B) $2,450
C) $2,500
D) $4,950
E) None of the above

12) You have determined that you will need to accumulate $1,000,000 in your retirement account in order to cover your inflation-adjusted shortfall. How much money would you have to put into a tax-deferred retirement account every year if you plan on retiring in 40 years? Assume a 8% average return on this account and there is nothing in the account today.
A) $1,458
B) $3,860
C) $5,957
D) $8,444

13) You purchased 100 shares of Quantex at $150 per share for a total investment of $15,000. The stock had a 3 for 1 split (after your purchase). How many shares do you now own and how much is your original investment worth now (after the split)?
A) 100 shares and $150 dollars
B) 300 shares and $15,000 dollars
C) 100 shares and $45,000 dollars
D) 300 shares and $45,000 dollars
E) None of the above

14) A married couple with 2 children and 5 grandchildren has an estate valued at $4 million. They decide to use gifts as a means to transfer some of their wealth to their family now and lower the value of their estate. If for a five-year period the couple gives the maximum tax-free gift to each of their children and grandchildren, the value of their estate would be reduced to
A) $84,000.
B) $420,000.
C) $3,580,000.
D) $3,916,000.

15) XYZ company issued bonds three years ago with a 7% coupon rate. Today, the market rate of interest was lowered to 4%. What most likely will happen next?
A) XYZ company will lower the par value of their bonds.
B) XYZ company will lower the coupon rate of their bonds.
C) XYZ company will call their bonds in.
D) None of the above are correct.

Explanation / Answer

ck ,sc .cs

Related Questions

Navigate

• Browse (All)
• Browse 1
• Subjects

---

---

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.