Reference no: EM133120553

Question 1 - Molly has $237,000 to invest. At 11:00a.m., an ETF is priced at $40.64 a share, but by the time the market closed the price had decreased to $36.29 a share. If Molly purchases the shares at 11:00a.m., what is the maximum number of shared she could buy?

Question 2 - Three years ago, an ETF was initiated with 3 million shares in 10 stocks each with a market value of $18. The ETF originally issued 45 million shares. Last year, Drew purchased 217,000 shares for $22.64 a share. The price has now increased to $26.86 a share, and Drew is considering redeeming his shares. Assume none of the original shares have been sold or redeemed. If Drew redeems his shares, what is his cost basis when he sells the shares?

Question 3 - Five years ago, an ETF was initiated with 2 million shares in 11 stocks each with a market value of $15. The ETF issued 48 million shares. Three years ago, Oliver purchased 192,000 shares in the ETF for $22.46 a share. The price has now increased to $28.18 a share, and Oliver is considering redeeming his shares. Assume none of the original shares have been sold or redeemed. If Oliver redeems his shares, how many shares of each stock will he receive? Please note that partial shares may not be purchased.

Question 4 - Pat is in the 15% dividends and capital gains taxes and 40% ordinary income taxes. Four years ago an exchange-traded fund (ETF) was set-up with 2 million shares of 10 stocks at an average price of $17 a share. The ETF issued 47 million shares. None of the original shares have been sold or redeemed. In March, Pat purchased 163,000 shares at $21.88 a share and sold them in October for $27.96 a share. What are the taxes on this transaction?