Lesson 3

If a company is paying a 75 cent ANNUAL dividend and you own 1,200 shares, how much will the company pay you a year just for owning the shares?

• 700

• 1200

• 900

• 1000

If a company XYZ is paying a $4.00 ANNUAL dividend and you own 75 shares, how much will the company pay you a year just for owning the shares?

• $75

• $400

• $350

• $300

If a company is paying a $1.99 ANNUAL dividend and you own 350 shares, how much will the company pay you a year just for owning the shares?

• $600

• $350

• $696.50

• $700

If a company is paying a $2.45 dividend and you own 225 shares, how much will the company pay you a year just for owning the shares?

• $225.25

• $895.25

• $730.25

• $551.25

If company is paying a $.41 dividend per share EACH QUARTER and you own 400 shares, how much will the company pay you that year just for owning the shares?

• 656

• 400

• 164

• 564

If you invest $25,000 today at 5% interest compounded annually, how much will you have in 4 years?

• $28,000.75

• $35,545.34

• $33,700.00

• $30,387.66

Veronica, age 18, invests $100 per month into her Roth IRA. Each $100 buys shares of XYZ mutual fund. For the last 6 months, she purchased $100 worth of XYZ at prices of $25, $20, $10, $20, $25, & $10. What is his WEIGHTED average purchase price of the mutual fund over the last 6 months? What investing strategy is this called?

• $40.00/Asset Allocation

• $15.79/Dollar-Cost Averaging

• $20.75/Dollar-Cost Averaging

• $25.25/Diversification

If you invest $10,000 today at 7% interest compounded annually, how much will you have in 3 years?

• $11,750.65

• $22,250.43

• $12,250.43

• $10,000.00

Current risk-free rate = 5% Expected S&P 500 return = 10% Beta of risky stock ABC = 1.5 What is the Required (Expected) Return of ABC stock? Formula is Required (Expected) Return = RF Rate + (Market Return – RF Rate) * Beta

• 8.9%

• 17.5%

• 10.2%

• 12.5%

Current risk-free rate = 6%

Expected S&P 500 return = 11%

Beta of risky stock ABC = 1.8 What is the Required (Expected) Return of ABC stock?

• 20.5%

• 15.0%

• 13.25%

• 16.2%