Question

9. A customer sells short 100 shares of XYZ at $50 per share. The credit balance in the customer's

account after the customer deposits the required margin is:

a. $2,500

b. $5,000

c. $7,500

d. $10,000

10. How many semi-annual periods would it take for a $2,000 deposit to grow to $6,798 at 12%

compounded semi-annually?

a. 17

b. 19

c. 21

d. 25

e. none of the above

11. Charlie Stone wants to retire in 35 years (he is currently 22) and be able to withdraw $250,000

per year for 15 years. Charlie wants to receive the first payment at the end of the 35th year. Using

an annual interest rate of 10%, how much should Charlie deposit at the end of each of the 35 years

in order to achieve his goal?

a. $5,245.67

b. $10,765.32

c. $26,899.41

d. $7,717.63

e. none of the above

Answer #1

9). Credit balance = proceeds of sale + margin required on the sale

= (100*50) + 50%*(100*50) = 7,500 (Option C) (Assuming a margin requirement of 50% since margin is not given in the question)

10). Let the number of semi-annual periods be n. Then,

future value = amount*(1+ semi-annual interest rate)^n

6,798 = 2,000*(1+6%)^n

n = ln(6,798/2,000)/ln(1+6%) = 20.98 or 21 periods (Option C)

11). Amount required at the end of 35 years: PMT = 250,000; N = 15; rate = 10%, solve for PV.

PV = 1,901,519.88

Amount required to be invested p.a. for 35 years: FV = 1,901,519.88; N = 35; rate = 10%, solve for PMT

Annual investment = 7,016.05 (Option E)

4. An investor purchases 100 shares of xyz stock at 67
and 1/2 and writes an at-the-money call for a total premium of $3
75. Margin requirements are at 50%. What is the net cash deposit
that is required in his margin account?
a. 3,000
b. 2,000
c. 2?187.50
d. 3,375
e. none of the
above
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price at expiration is
a. infinite
b. equal to the
exercise price...

XYZ has one share of stock and one bond. The total value of the
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semi-annual coupons with the next one expected in 6 months, and
matures in 3 years. The stock pays annual dividends that are
expected to be $12.40 and paid in one year. What is the expected
return for the stock?
a) 9.83%...

33)Rhianna purchased 1,500 shares of XYZ
Corporation for $15,000. This year, XYZ Corp. declared a 10%
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A) $6.00.
B) $7.57.
C) $9.09.
D) $10.00.
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percent. What is the price of bond B?
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b.
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3. You purchased 100 shares of JNJ stock at $50 per share. The
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total loss to no more than $700. Which of the following action will
help you?
OPTIONS;
A. place a stop-buy order at $57
B. place a stop-loss order at $43
C. place a limit buy order at $53
D. place a limit sell order at $47
E. none of the above
4.
Which of...

31. ABC is expected to pay a
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A 2.11%
B 4.21%
C 5.01%
D 9.14%
E None of
the above
32 What is the fair
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A $50,266.87
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C $60,666.87...

You start your own company and issue 100% of the 800,000 shares
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*
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