Blog

A benchmark index has three stocks priced at $15, $78, and $33. The number of outstanding shares for each is 494,000 shares, 580,000 shares, and 304,000 shares, respectively. If the market value weighted index was 700 yesterday and the prices changed to $16.40, $81.40, and $36.80 today, what is the new index value?

Contributions to a traditional retirement plan are ________, and contributions to a Roth retirement plan are ________.

Suppose a stock had an initial price of $56 per share, paid a dividend of $2.25 per share during the year, and had an ending share price of $70. Compute the percentage total return.

A stock has produced returns of 24 percent, 15 percent, –43 percent, and 38 percent over the past four years, respectively. What is the geometric average return?

Value firms typically have ___________ P/E ratios than growth firms. On average, over time, value stocks tend to have ______________ returns than growth stocks.

Which of the following comparisons CANNOT be made using ratio analysis.

Given the following financial data: Net income / Sales = 15 percent; Sales / Total assets = 3.1 times; Debt / Total assets = 70 percent; compute return on assets.

You are the chief financial officer of Davidson Industries. On multiple occasions, you have engaged in insider trading but have never been able to earn any abnormal returns. Which form of market efficiency most likely exists given your situation?

Assume you buy 550 shares of stock at $12.60 per share on margin (43 percent). How much would you need to contribute to initiate this position?

Assume you buy 400 shares of stock at $9.30 per share on margin (75 percent). How much would you need to contribute to initiate this position?