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Assume you buy 100 shares of IBM common stock on margin at $125 per share....

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Question

Finance

  1. Assume you buy 100 shares of IBM common stock on margin at $125 per share. If the initial margin is 60%, what is the amount that you put in?

    $3750

    $10,120

    $7500

    $6250

0.3 points

QUESTION 2

  1. The price of a stock is $35 at the beginning of the year and $34 at the end of the year. If the stock paid a $2 dividend, what is the holding-period return for the year?

    1.25%

    4.73%

    2.86%

    3.54%

0.3 points

QUESTION 3

  1. If the nominal rate of return on investment is 6% and inflation is 1% over a holding period, what is the real rate of return on this investment?

    4.95%

    3.92%

    4.54%

    5.23%

0.3 points

QUESTION 4

  1. The geometric average of -5%, 8%, and 12% is _________.

    7.24%

    5.25%

    4.74%

    9.24%

0.3 points

QUESTION 5

  1. I bought a zero coupon bond for $700 in 2016. The bond had a face value of $1000, and at the time of my purchase, the bond had 10 years until maturity. I sold the bond 3 years later in 2018 for the price of $768. What was the closest to the annualized holding period return of this investment?

    3.14%

    1.53%

    3.24%

    1.17%

0.3 points

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