Quiz

Please Note: It is recommended that you save your response as you complete each question.

Question 1 (1 point)
Which is the correct statement? Question 1 options: 1) The effective annual yield takes account of compounding while the nominal does not. 2) The nominal annual yield takes account of compounding while the effective does not. 3) The nominal annual yield takes account of earned interest while the effective does not. 4) There is no difference between the effective annual and nominal annual yield.

Question 2 (1 point)
Which is the correct statement? Question 2 options: 1) A fixed sum deals with multiple payments while an annuity deals with just one. 2) An annuity deals with multiple payments while a fixed sum deals with just four. An annuity deals with multiple payments through time while a fixed sum deals with just two points in time. A fixed sum deals with multiple payments while an annuity deals with just two points in 4) time. 3)

Question 3 (1 point)
If you place $100 in the bank today and 7 years from now it grows to $180, what rate of interest are you earning each year? Question 3 options: 1) 10.04% 2) 80.0% 3) 8.76%

4) 5.87%

Question 4 (1 point)
The future value of $1,000 at 5% one hundred years from now is Question 4 options: 1) $131,501 2) $500,000 3) $82,407 4) $105,000

Question 5 (1 point)
How long would it take for $1 to grow into $8 if you could earn 20% a year? Question 5 options: 1) 40 years 2) 20 years 3) 11.41 years 4) 8.74 years

Question 6 (1 point)
Which would be the most valuable if interest rates are 8%? Question 6 options: 1) $120,000 right now. 2) $125,000 next year. 3) $135,000 two years from now

Question 7 (1 point)

Bill plans to fund his individual retirement account (IRA) with the maximum contribution of $2,000 at the end of each year for the next 20 years. If Bill can earn 12 percent on his contributions, how much will he have at the end of the twentieth year? Question 7 options: 1) $19,292 2) $14,938 3) $40,000 4) $144,104

Question 8 (1 point)
The present value of an ordinary annuity(paid at end of each year) of $2,350 each year for eight years, assuming an opportunity cost of 11 percent, is Question 8 options: 1) $ 1,020 2) $27,869 3) $18,800 4) $12,093

Question 9 (1 point)
9. If you put $1000 in the stock market and it rises 20% this year and falls 20% the year after that, how much would you have? Question 9 options: 1) $1,000 2) More than a $1,000 3) Less than a $1,000

Question 10 (1 point)
What is the effective annual rate of 12% compounded monthly? Question 10 options:

1) 12% 2) 11.45% 3) 12.68% 4) 12.25%

Quiz
Please Note: It is recommended that you save your response as you complete each question.

Question 1 (1 point)
Assume you had purchased Citicorp for $33 a share. Since then the stock price has risen to $40 a share. What type of order could you use to sell the stock only if the price started to fall? Question 1 options: 1) Market order 2) Limit-buy order 3) Limit-sell order 4) Stop-loss order

Question 2 (1 point)
Assume you buy $50,000 worth of stock on 60% margin. Assume your borrowing costs are 10% per year and you expect the stock price to go from $100 to $110 over the next year. What is your dollar return after borrowing costs? Question 2 options: 1) $5,000 2) $3,000 3) $7,000 4) $2,000

Question 3 (1 point)

You note that SIRI stock has 1,000,000 shares outstanding and the average daily trading volume is 50,000 shares. Its current price is $40. If 200,000 shares are sold short, what is the short interest ratio and the shares shorted as a percentage of float? Question 3 options: 1) 4 and 20% 2) 5 and 20% 3) 4 and 5% 4) 5 and 25%

Question 4 (1 point)
Assume you short sale 100 shares of stock at $80 a share. If the stock falls to $70 a share, how much did you make or lose per share? Question 4 options: 1) $10 2) -$10 3) $80 4) $70

Question 5 (1 point)
Which of the following statements is false? Question 5 options: 1) The DJIA has 30 stocks. 2) The DJIA is a price weighted index. 3) Every 1 point increase in the DJIA means stock prices went up by $1. 4) The DJIA occasionally changes the stocks used to calculate the index.

Question 6 (1 point)
A stock is selling for $52 a share and has a PE of 26. What is the interpretation of the PE number?

Question 6 options: 1) For every $1.00 MEG earns, you pay $26 per share. 2) For every $0.10 MEG earns, you pay $26 per share. 3) For every $2.60 MEG earns, you pay $52 per share 4) For every $26 MEG earns, you pay $52 per share.

Question 7 (1 point)
You see that IBM had a 100% stock dividend last year. What does that mean? Question 7 options: 1) IBM issued 1 additional share for every 1 share outstanding. 2) IBM replaced every share outstanding with one new share. 3) IBM paid a cash dividend equal to 100% of the value of its stock last year.

Question 8 (1 point)
Albertson's Bond rating is B while Comcast is BBB. What is true about the rating of the two bonds? Question 8 options: 1) Both bonds are considered junk bonds 2) Both bonds are considered investment grade bonds 3) Albertsons is considered a junk bond and Comcast is considered investment grade 4) Comcast is considered a junk bond while Albertsons is considered investment grade

Question 9 (1 point)
All else equal, you would rather buy a stock with a PE ratio of 20 compared to a stock with a PE ratio of 10. Question 9 options: 1) True 2) False

Question 10 (1 point)
A municipal bond yields 8% while a corporate bond yields 10%. If you are in the 25% tax bracket, which bond should you buy? Assume you are not buying the bond in a tax deferred account. Question 10 options: 1) The municipal bond 2) The corporate bond 3) It does not matter, they both have the same after tax yield.

Question 11 (1 point)
A treasury bond is has a bid of 100:21 and an ask of 100:22. If you sell the bond, you will receive the Question 11 options: 1) ask price 2) bid price

Question 12 (1 point)
A 10 year annual 8% corporate bond is selling for $1,100. When it matures, you will receive Question 12 options: 1) an $80 coupon and $1,000 2) $800 of coupons and $1,100 3) an $88 coupon and $1,000 4) an $88 coupon and $1,100