Reference no: EM133015871
Questions -
Q1) In 2015, John and Nicole earned a combined taxable income of $148,800 from employment plus $1,000 in long term capital gains and they file a joint tax return. What is their total federal income tax? Round to the nearest dollar.
A) $37,150
B) $29,063
C) $29,593
D) $28,963
Q2) Josh earned $82,500 in taxable income, all from wages and interest, and files an individual tax return. What is the amount of Josh's taxes for the year 2015? Round to the nearest dollar.
A) $13,750
B) $16,481
C) $18,425
D) $12,285
Q3) For a taxpayer in the 25% marginal tax bracket, a long-term capital gain realized in 2015 will be taxed at
A) 5%.
B) 10%.
C) 15%.
D) 25%.
Q4) Andrew and Jennifer are in the 25% marginal tax bracket. Three years ago they purchased 100 shares of stock at $20 a share. In 2015, they sold the 100 shares for $29 a share. What is the amount of federal income tax they owe as a result of this sale?
A) $135
B) $165
C) $225
D) $435
Q5) Michelle and Patrick are in the 28% marginal tax bracket. They bought 100 shares of DJN stock at $45 per share and sold them 4 years later in 2015 at $22 per share? By how much did their loss reduce their taxes in the year when they sold the stock?
A) $0
B) $644
C) $345
D) $1,260
Q6) Kayla invested $3,000 and purchased shares of a German corporation when the exchange rate was $1.00 = .91 euro. After six months, she sold all of the shares for 3,180 euros, when the exchange rate was $1.00 = .88 euro. No dividends were paid during the time Heidi owned the shares of stock. What is the amount of Kayla's gain or loss on this investment?
A) $613.64 loss
B) $613.64 gain
C) $497.60 loss
D) $497.60 gain
Q7) Kelly bought a stock at a price of $22.50. She received a $1.75 dividend and sold the stock for $24.75. What is Kelly's capital gain on this investment?
A) $4.00 B) $3.75 C) $2.25 D) $1.75
Q8) Ashley purchased a stock at a price of $27 a share. She received quarterly dividends of $0.75 per share. After one year, Ashley sold the stock at a price of $29.25 a share. What is her percentage holding period return on this investment?
A) 10.3%
B) 11.1%
C) 17.9%
D) 19.4%
Q9) Bob's house has doubled in value since he bought it 30 years ago. The house's value has increased by an annual rate of
A) 2.34%.
B) 3.33%.
C) 6.67%.
D) 100%.
Q10) Christopher invests $400 today at a 4% rate of return which is compounded annually. What is the future value of this investment after four years?
A) $342
B) $416
C) $464
D) $468
Q11) Roy is going to receive a payment of $5,000 one year from today. He earns an average of 6% on his investments. What is the present value of this payment?
A) $4,717
B) $4,821
C) $5,000
D) $5,300
Q12) Zachary has purchased an investment that he expects to produce income of $3,000 at the end of the first year and $4,000 at the end of the second year. If he pays $5,800 for this investment, what is the internal rate of return?
Q13) The markets in general are paying a 2% real rate of return. Inflation is expected to be 3%. ABC stock commands a 6% risk premium. What is the expected rate of return on ABC stock?
A) 2%
B) 5%
C) 8%
D) 11%
Q14) The required rate of return on the Cosmos Corporation's common stock is 10%, the current real rate of return in the market is 1%, and the inflation rate is 3%. In this case, the risk premium associated with Cosmos stock is
A) 5%.
B) 6%.
C) 7%.
D) 8%.
Q15) The required return on Beta stock is 14%. The risk-free rate of return is 4% and the real rate of return is 2%. How much are investors requiring as compensation for risk?
A) 8%
B) 10%
C) 12%
D) 14%
Q16) Lauren purchased a stock for $28 a share and sold it six months later for $31. While she owned the stock, Lauren received two quarterly dividends of $0.35 per share. Brittany's holding period return on this stock is
A) 13.2%.
B) 10.7%.
C) 11.9%.
D) 26.4%.
Q17) Christopher purchased 200 shares of ABC stock at $21.25 per share. After nine months, he sold all of his shares at a price of $19.88 a share. Christopher received a total of $0.55 per share in dividends during the time he owned the shares. Jake's holding period return is
A) -6.4%.
B) -3.9%.
C) 2.6%.
D) 9.7%.