1. (The stock of Trudeau Corporation went from $27 to $40 last year.
The firm also paid $1 in dividends during the same year. Thereafter, in the
following year, the dividend was raised to $1.40. However, a declining market
toward the end of the year caused the stock to fall to $24 per share from $40.
Compute the rate of return (gain or loss) to the stockholder in the following

2. Given the following financial data, compute the return on assets
and return on equity: net income/sales = 6%, sales/total assets = 2.5X, and
debt/total assets = 25%.

What is the approximate
yield to maturity of an 8% coupon bond with a par value of $1,000? The bond is
currently selling for $920 and has 5 years to maturity.

4. A convertible bond has a face value of $1,000 and the conversion
price is $60 per share. The stock is selling at $25 per share. The bond pays
$85 per year in interest and is selling in the market for $945. It matures in 7
years. Market rates are 10% annually.
(I) What is the conversion ratio?
(II) What is the conversion value?

5. If a $100,000 Treasury bond futures contract changes by 5/32, what
is the dollar change?

6. A mutual fund is set up to charge a load. Its net asset value is
$23.40 and its offer price is $24.70. What is the dollar value of the load (commission)?

7. A shopping center has an annual net operating income of $1,025,000
and a capitalization rate of 10%. What is its value?

8.An investment has the
following range of outcomes and probabilities.

Outcomes (Percent)

Probabilities of







Calculate the expected value and the standard deviation (round to two places
after the decimal point where necessary). (Points
: 15)