Topic Test

Question 1

Nezzie invests in 300 shares of stock in the fund shown below.Name of FundNAVOffer PriceLKIT Mid-Cap$16.58$16.99Nezzie plans to sell all of her shares when she can profit $5,000. What must the net asset value be in order for Nezzie to sell?

Revolt · Accepted Answer

$33.66

Question 2

Will is 30 years old and works for a company that matches his 401(k) contribution up to 3%. The interest rate for his 401(k) is 7.13%. If he puts away 9% of his $41,000 salary every year, how much would he have saved in 10 years? Round your answer to the nearest cent.

Revolt · Accepted Answer

$68,395.76

Question 3

Stephen bought 85 shares of United Rotators at $6.34 each, 110 shares of Dowc Beverage Co. at $13.13 apiece, and 133 shares of Esti Transport at $7.10 each. If Stephen’s broker collects a commission of $12.50 for every ten shares bought or sold, how much did Stephen spend in total, to the nearest dollar?

Revolt · Accepted Answer

$3,338

Question 4

Wayne is planning to sell the twenty-room apartment building he bought fifteen years ago, for which he paid $759,000. The real estate market in his area has been falling since that time, and the property has decreased in value by 3.8% every year. Wayne rents each of his apartments for $495 per month, and upkeep on the building costs him $26,400 annually. Assuming that Wayne has kept his apartment complex constantly three-quarters full, what will his net profit or loss be when he sells the building, to the nearest hundred dollars?

Revolt · Accepted Answer

$606,000 profit

Question 5

David has a bank account which pays interest at the rate of 1.5% per year, compounded annually. Determine what amount David must have in the bank, given that he would like to draw an annual salary of $32,635.15 from his account at the end of each year for 30 years. Round to the nearest cent.

Revolt · Accepted Answer

$783,760.48

Question 6

Four years ago, Sam invested in Grath Oil. She bought three of its $1,000 par value bonds at a market price of 93.938 and with an annual coupon rate of 6.5%. She also bought 450 shares of Grath Oil stock at $44.11, which has paid an annual dividend of $3.10 for each of the last ten years. Today, Grath Oil bonds have a market rate of 98.866 and Grath Oil stock sells for $45.55 per share. Use the scenario above to select the best answer.

Revolt · Accepted Answer

The bonds showed a higher percentage return than that of the stocks.

Question 7

Which of the following services will be provided by a full-service broker but not by a discount broker?I. Research of potential investment opportunitiesII. Purchase and sale of stock at your requestIII. Recommendation of investments

Revolt · Accepted Answer

I and III

Question 8

Which kind of bond pays interest which is exempt from tax?

Revolt · Accepted Answer

Municipal Bonds

Question 9

Aria paid $75,000 for her house. Its property value increased by 2.2% per year. When Aria sold her house after eleven years, how much was it worth, to the nearest hundred dollars?

Revolt · Accepted Answer

$95,300

Question 10

Diana is trying to choose a broker who will help her purchase a par value $1,000 corporate bond from Deegan Pharmaceuticals. Broker P charges a commission of 4.4% of the market value of each bond purchased, and Broker Q charges a flat fee of $32.50 for each bond purchased. If bonds from Deegan Pharmaceuticals are selling at 104.682, which broker will give Diana the better deal, and by how much?

Revolt · Accepted Answer

Broker Q’s commission will be $13.56 less than Broker P’s.

Topic Test Answers

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