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
year.
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%.
3.
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 |
|
5% |
.25 |
|
7% |
.50 |
|
12% |
.25 |
Calculate the expected value and the standard deviation (round to two places
after the decimal point where necessary). (Points
: 15)
