CHAPTER 1 QUIZ 83 TO 87

CHAPTER 1  QUIZ 83 TO 87
83. Historically, the real rate of return in the U.S. economy has been: 
A. 1-2%.
B. 2-3%.
C. 3-4%.
D. 4-5%.
E. 5-6%.
 
84. Which of the following is not a form of real asset? 
A. Rare paintings
B. Baseball cards
C. Diamonds
D. Real estate
E. Commodity futures
 
85. Under the Economic Growth and Tax Reconciliation Act of 2001, when will estate taxes be eliminated? 
A. 2008
B. 2009
C. 2010
D. 2019
E. The estate tax will not be eliminated.
 
 
 

Essay Questions
 
86. a) The stock of Trudeau Corporation went from $27 to $40 last year. The firm also paid $1 in dividends during the year. Compute the rate of return.
b) In the following year, the dividend was raised to $1.40. However, a declining market toward the end of the year caused the stock to fall to $24 per share from $40. Compute the rate of return (gain or loss) to the stockholder in the following year. 

 

 

 
 
87. (a) The stock of Furniture Unlimited went from $90 to $99 last year. The firm also paid 80 cents in dividends. Compute the rate of return.
(b) During the next year, the dividend paid was $1.60 per share and the stock closed at $93 per share, down from $99 per share at the beginning of the year. Compute the annual gain or loss for the second year holding period.