Skye purchased 100 shares of Moreno, Inc., for $20 a share. One year later, she sold the shares for $21 dollars. Over the year, Moreno paid a $0.25 quarterly dividend. What was Skye's gain or loss and how much investment income did he earn?
A)$2 total gai
C)$1 gain and $1 in income
Gains are derived from opening and closing trades buy and sell in this example). She bought at $20 and sold for $21, so there is $1 in gain. She collected four quarterly dividends for $0.25 each, so a total in $1 in investment i
An investor has a long position in ABC Chemical Corp. (ABCCC), with a substantial unrealized loss. Wishing to use that loss to offset realized gains, the investor sells the stock. In reinvesting the proceeds of the sale, the investor could avoid violating
B)ABCCC put options.
In order to avoid violations of the wash-sale rule, investors selling a stock at a loss cannot purchase that same, or substantially identical, security within a 30-day period prior to or following the sale incurring the loss. Substant
Drew purchased 100 shares of Moreno, Inc., for $20 a share. One year later, he sold the shares for $21 dollars. Over the year, Moreno paid a $0.25 quarterly dividend. What is Drew's total return?
A)$2.00.
B)10.00%.
C)$1.00.
D)5.00%.
B)10.00%.
Total return includes any income the investment return produces; it is also expressed as a percentage, not dollars. The formula is as follows: ((sales proceeds - cost basis) + income) / cost basis.
Using the formula here, the calculation is as f
All of these dates are set by the board of directors of a corporation except
A)the ex-dividend date.
B)the payable date.
C)the declaration date.
D)the record date.
A)the ex-dividend date.
The ex-date is set by the market center (i.e., an exchange), or is set by FINRA if it is an over-the-counter traded security.
Which of these is correct regarding the ex-date for a common stock?
I. It is set by the board of directors.
II. It is set by FINRA or the exchange.
II. It is the first date an investor can purchase a security and not be entitled to the dividend.
IV. It is
B)II and III
Ex-dates, for securities that trade in the secondary markets, are set by the market center where the trade occurs. It represents the day the new owner of a security will no longer receive the dividend if the trade settles regular way.
Your customer purchased 1,000 shares of SmallCo Stock at $10 a share. SmallCo pays no dividends. Exactly one year later, the customer sold the shares for $12 a share. They realized a
A)$2,000 short-term capital gain.
B)$2,000 short-term capital loss.
C)$2
A)$2,000 short-term capital gain.
They bought the shares for $10, and sold for $12, so a $2,000 gain. To be a long-term gain the position must be held for more than one year.
Four of the best-known indices and averages are listed as follows. How do they rank from most to fewest issues in the index?
I. Dow Jones Industrial Average
II. NYSE Composite Index
III. Standard & Poor's 500
IV. Wilshire 5000
A)IV, II, III, I
B)II, III,
A)IV, II, III, I
The Wilshire actually had about 3,800 stocks, but still the most on this list. The NYSE composite is around 1,900. The S&P 500 is actually about 500, and the Dow Jones industrials in 30.
Your customer has performed the following trades
- Bought 200 shares of ABC at $40
- Bought 400 shares of ABC at 50
- Sold 600 shares of ABC at 55
What is the result of these trades?
A) A $6,000 gain
B) A $5,000 loss
C) A $6,000 loss
D) A $5,000 gain
D) A $5,000 gain
They bought 200 at 40 for $8,000; then 400 at 50 for $20,000; then sold 600 at 55 for $33,000. $33k - $28k = profit of $5,000.
The Windmill Growth Fund is composed of many stocks from a variety of large companies. It has a stated objective of capital appreciation from holding the stock of the large companies. If you wanted to compare the performance of the fund to the market, whi
A)S&P 500
The S&P 500 is the standard benchmark for large cap stocks. The S&P 400 is for midcap stocks. The Wilshire 5000 is a broad-based-U.S. equity index that includes large, mid, and small cap stocks. The EAFE is an index for international equities.
On March 3, the board of directors of Seabird Airlines declares a $0.20 a share dividend payable to holders of record, as of March 30. Seabird stock jumps on the news from $35 a share to $40 a share on the news. The current yield of Seabird stock is
A)5.0
D)2.00%.
The formula is (quarterly dividend x 4) / current market value. (0.2 x 4) / 40 = (.8) / 40 = .02 (2%)