The stock of Trudeau Corporation went from $27 to $40 last year.

1. (The stock of Trudeau Corporation went from $27 to $40 last year. The firm also paid $1 in dividends during the same year. Thereafter, 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.

2. Given the following financial data, compute the return on assets and return on equity: net income/sales = 6%, sales/total assets = 2.5X, and debt/total assets = 25%.

3. What is the approximate yield to maturity of an 8% coupon bond with a par value of $1,000? The bond is currently selling for $920 and has 5 years to maturity.

4. A convertible bond has a face value of $1,000 and the conversion price is $60 per share. The stock is selling at $25 per share. The bond pays $85 per year in interest and is selling in the market for $945. It matures in 7 years. Market rates are 10% annually.
(I) What is the conversion ratio?
(II) What is the conversion value?

5. If a $100,000 Treasury bond futures contract changes by 5/32, what is the dollar change?

6. A mutual fund is set up to charge a load. Its net asset value is $23.40 and its offer price is $24.70. What is the dollar value of the load (commission)?

7. A shopping center has an annual net operating income of $1,025,000 and a capitalization rate of 10%. What is its value?

8.An investment has the following range of outcomes and probabilities.

Outcomes (Percent) Probabilities of Outcomes
5% .25
7% .50
12% .25

Calculate the expected value and the standard deviation (round to two places after the decimal point where necessary). (Points : 15)