Chapter 9.A, Problem 1TY

You are planning to open an internet business selling stock market analysis, and are offering two options to consumers: A: You charge $150 per year. This grants access to all of your basic financial literacy information, as well as 12 months of access to your stock market analysis memos, which you provide monthly. B: You charge $50 for access to your basic financial literacy information, then charge $10 each for your monthly stock market analysis memos. Which one is the best offer?

Which of the following is a reason why an investor would place a stop buy order on a stock? To ensure a short position is closed out for profit To ensure that the broker executes immediately at the current market price To ensure the stock is sold before its price falls to a specified level To ensure the stock is purchased when its price is rising

What will happen if two assets are earning the same expected return, but one is more risky than the other?

Please no written by hand Meagan Davies manages a portfolio of 200 common stocks. Her staff classified the portfolio stocks by 'industry sector' and 'investment objective'. Investment Objective Industry Sector Total Electronics Healthcare Airlines Growth 100 5 35 140 Income 40 15 5 60 Total 140 20 40 200 Which of the following is NOT true? Select one: Growth and Income are complementary events. Electronics and Growth are dependent. Electronics and Healthcare are mutually exclusive. Airlines and Healthcare are collectively exhaustive. All the answers are not true.

Susie works two jobs so she can pay tuition without using loans, helps her sick mother with housework and errands, and is attending college. She knows she should be saving for retirement. Which strategy is best for Susie?   Select one: a. Auto-invest a small fixed amount in a low-cost S&P 500 index fund every month b. Buy shares of the top 5 performing stocks every month. Switch which companies she's investing in based on their monthly performance c. Wait until she's got more disposable income to invest -- if she starts now, she won't be investing enough to make it worthwhile d. Pick one company's stock -- maybe her favorite store or restaurant -- and invest the same amount every month

The market risk premium is 8 percent and the risk-free rate is 5 percent. Which stock has the most systematic risk? Which one has the most unsystematic risk? Which stock is “riskier”? Explain.

A firm is expected to pay a dividend of $1.35 next year and $1.50 the following year. Financial analysts believe the stock will be at their price target of $68 in two years.Compute the value of this stock with a required return of 10 percent. (Do not round intermediate calculations. Round your answer to 2 decimal places.)

In order to benefit from diversification, the returns on assets in a portfolio must:   a. Not be perfectly positively correlated b. Have the same idiosyncratic risks c. Be perfectly positively correlated d. Be perfectly negatively correlated

Why might a company’s stock price fall after record earnings are announced? Conversely, why might the stock price increase after losses are disclosed?