Chapter 12 Quiz 2 Review

Andres purchases 300 shares stock in Tesla. She paid a total of $8,538.00 for the stock. You sold your stock for $66.52 a share and paid a commission of $27.50 for the transaction. Did Andres earn a profit or loss?

• $19,956.00

• $19,928.50

• $11,390.50

• $11,445.50

Answer explanation

1. Sell your shares by multiplying the number of stocks by the price per share.

2. Subtract the commission

3. Subtract the original investment.

Chelsea has 425 shares of stock in Microsoft. The annual dividend per share is $1.63 and the stock had a low of $68.10 and a high of $90.07. What was Chelsea's total annual dividend?

• $692.75

• 2.4%

• 1.8%

• $28,942.50

Answer explanation

To find the total annual dividend just multiply the annul dividend per share times the number of shares.

The problem did not say to find the yield, so it's okay to stop at this point.

Money you earn from holding stock. Gets paid quarterly (4 times per year)

This investment takes the savings of multiple people and invests the money in stocks, bonds, or both and must be paid up front.

This is cost of a single share of a Mutual Fund

Major companies and local governments will sell these as a way to raise money.

With this investment, you don't pay any costs until you are ready to leave and sell your shares

Jonathan invests in a Mutual Fund that is front loaded. He invests $4,400 in the fund and the loading rate is 4%. The NAV of the share is $25.00. How many shares did Jonathan purchase?

• $176.00

• 168.96

• 176

• $110,000.00

Answer explanation

1. Find the loading charge by multiplying the loading rate times the investment amount.

2. Subtract

Investment - loading charge

3. Divide this answer by the Net Asset Value per share.

*your answer should not have a dollar sign or percentage because your are finding the number of shares!

Samantha invested $12,600 in Type-B mutual fund. The NAV at time of purchase was $18.00 and was $20.25 when she sold. The loading rate was 3%. Did Samantha make a profit or loss?

• 700

• $14,175.00

• $1,149.75 profit

• $1,149.75 loss

Answer explanation

1. find the number of shares (loading charge should be zero, because its type-B)

2. find the selling price by multiplying shares times the NAV when you sell.

3. Now find loading charge.

4. Subtract from the sale.

5. Subtract:

Net selling price - original investment.

A $10,000 bond through the city of Fresno is being sold at the quoted price of 94.75 with a 4.25% interest rate. What is the annual yield?

• $9,475.00

• $425.00

• 4.49%

• 2,229%