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A client invests $5,000/year, beginning at the end of the current year, in an investment that returns 7% annually Determine the number of years needed to accumulate $125,645. 1. a. b. 12 2. Based on the information provided here, what is the holding period return (HPR) on the stock for the period fr om the beginning of year 1 until the end of year 2? Stock price beginning of year 1: $22.00 Dividends paid during year 1: $0.66 Stock price end of year 1: $25.00 Dividends paid during year 2: $0.68 Stock price end of year 2: $24.00 16.6% 7.600 15.2% a. b. c. 3. Two firms in the same industry are following different strategies: Y Co sells standard products at competitive prices and has a very strict credit policy, while Z Co sells differentiated products at premium prices and grants credit liberally to its customers. What are the likely observed differences in the gross profit margin and receivables turnover for Y Co compared to Z Co? Co's discount pricing should result in gross profit margin, and its strict credit policy should result in receivables turnover: a. lower; higher b. lower; lower c. higher; lower 4. The Stone Corporation operates in an industry with expected total industry sales of $160,000,000. Stone expects to have a 15% market share, a gross profit margin of 40%, an operating profit margin of 30%, interest expense of $580,000, and a tax rate of 30%. The firm's forecasted net income is closest to a. $6,314,000. b. $4,634,000 c. $9,674,000. 5. If you are forming a portfolio with the objective of minimizing risk, which of the following asset choices will most likely achieve that goal? Choosing: a. b. Two securities that are positively correlated Two securities that have no correlation c. Two securities that are negatively correlated

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