Fundamentals of Investments: Valuation and Management 9th Edition by Bradford Jordan test bank
$50.00 × (1 + .087) = $54.35
References
Multiple Choice Learning Objective:
01-01 How to
calculate the return
on an investment
using different
methods.
Difficulty: 1 Easy Section: 1.1 Returns
49.
Award: 1.00 point
A stock sold for $25 at the beginning of the year. The end of year stock price was $25.50. What is
the amount of the annual dividend if the total return for the year was 8.5 percent?
$1.23
$1.50
$1.63
$1.81
$2.12
($25.50 鈭� $25 + D) / $25 = .085; D = $1.63
References
Multiple Choice Learning Objective:
01-01 How to
calculate the return
on an investment
using different
methods.
Difficulty: 1 Easy Section: 1.1 Returns
50.
Award: 1.00 point
Todd purchased 600 shares of stock at a price of $68.20 a share and received a dividend of $1.42
per share. After six months, he resold the stock for $71.30 a share. What was his total dollar return?
$1,008
$1,860
$2,712
$3,211
$3,400
600 脳 ($71.30 鈭� $68.20 + $1.42) = $2,712
References
Multiple Choice Learning Objective:
01-01 How to
calculate the return
on an investment
using different
methods.
Difficulty: 1 Easy Section: 1.1 Returns
51.
Award: 1.00 point
Christine owns a stock that dropped in price from $43.57 per share to $39.49 per share over the
past year. The dividend yield on that stock is 1.6 percent. What is her total return on this investment
for the year?
鈭�11.31%
鈭�10.49%
鈭�9.11%
鈭�8.73%
鈭�8.04%
[($39.49 鈭� $43.57) / $39.49] +.016= 鈭�.0873, or 鈭�8.73%
References
Multiple Choice Learning Objective:
01-01 How to
calculate the return
on an investment
using different
methods.
Difficulty: 1 Easy Section: 1.1 Returns
52.
Award: 1.00 point
You have been researching a company and have estimated that the firm's stock will sell for $44 a
share one year from now. You also estimate the stock will have a dividend yield of 2.18 percent. How
much are you willing to pay per share today to purchase this stock if you desire a total return of 15
percent on your investment?
$37.55
$38.00
$38.24
$39.00
$40.20
.15 = [($44 − P 0 ) / P 0 ] + .0218; P 0 = $39.00
References
Multiple Choice Learning Objective:
01-01 How to
calculate the return
on an investment
using different
methods.
Difficulty: 1 Easy Section: 1.1 Returns
53.
Award: 1.00 point
Shane purchased a stock this morning at a cost of $13 a share. He expects to receive an annual
dividend of $.27 a share next year. What will the price of the stock have to be one year from today if
Shane is to earn an 8 percent rate of return on this investment?
$12.38
$12.60
$12.88
$13.77
$14.28
.08 = (P 1 − $13 + $.27) / $13; P 1 = $13.77
References
Multiple Choice Learning Objective:
01-01 How to
calculate the return
on an investment
using different
methods.
Difficulty: 1 Easy Section: 1.1 Returns
54.
Award: 1.00 point
Ellen just sold a stock and realized a 7.5 percent return for a 7-month holding period. What was her
annualized rate of return?
13.20%
14.49%
15.78%
16.29%
27.20%
1 + EAR = (1 + .075) 12/7 − 1 = .1320, or 13.20%
References
Multiple Choice Learning Objective:
01-01 How to
calculate the return
on an investment
using different
methods.
Difficulty: 1 Easy Section: 1.1 Returns
55.
Award: 1.00 point
You purchased a stock eight months ago for $36 a share. Today, you sold that stock for $41.50 a
share. The stock pays no dividends. What was your annualized rate of return?
23.32%
23.77%
25.70%
26.03%
27.67%
HPR = ($41.50 − $36) / $36 = .1528
Annualized rate of return = (1 + .1528) 12/8 − 1 = .2377, or 23.77%
References
Multiple Choice Learning Objective:
01-01 How to
calculate the return
on an investment
using different
methods.
Difficulty: 2
Medium
Section: 1.1 Returns
56.
Award: 1.00 point
Eight months ago, you purchased 300 shares of a non-dividend paying stock for $27 a share. Today,
you sold those shares for $31.59 a share. What was your annualized rate of return on this