# 2024 – LO1 1 Calculate amount to invest to meet objectives Use Worksheet 11 1 stacey starkey is now employed

FIN – 2024

LO1 1. Calculate amount to invest to meet objectives. Use Worksheet 11.1. stacey starkey is now employed as the managing editor of a well-known business journal. although she thoroughly enjoys her job and the people she works with, what she would really like to do is open a bookstore of her own. she would like to open her store in about eight years and figures she’ll need about \$50,000 in capital to do so.

Given that stacey thinks she can make about 10 percent on her money, use Worksheet 11.1 to answer the following questions. a. How much would Stacey have to invest today, in one lump sum, to end up with \$50,000 in eight years? b. If she’s starting from scratch, how much would she have to put away annually to accumulate the needed capital in eight years? c.

If she already has \$10,000 socked away, how much would she have to put away annually to accumulate the required capital in eight years? d. Given that Stacey has an idea of how much she needs to save, explain how she could use an investment plan to help reach her objective.

LO2 2. Rationale for stock exchange listings.

## Financial markets

LO2 3. Types of financial markets. What is the difference between primary and secondary markets and between broker and dealer markets?

LO3 4. Market and limit orders. suppose that Ralph skelton places an order to buy 100 shares of Google. Explain how the order will be processed if it’s a market order. Would it make any difference if it had been a limit order? Explain. LO4 5. Finding and applying market index quotes. Using resources like The Wall Street Journal or Barron’s (either in print or online), find the latest values for each of the following market averages and indexes, and indicate how each has performed over the past six months: a.

DJIA b. S&P 500 c. NASDAQ Composite d. S&P MidCap 400 e. Dow Jones Wilshire 5000 f.

## Obtaining stock market quotes

LO4 6. Obtaining stock market quotes. Using the Internet site for Yahoo! Finance (http://finance.yahoo.com), find the 52-week high and low for Coca-Cola’s common stock (symbol Ko).

LO4 7. Interpreting stock report information. Using the Value Line Investment Survey report in Exhibit 11.5, find the following information for apple. a. What was the amount of revenues (i.e., sales) generated by the company in 2014? b. What were the latest annual dividends per share and dividend yield? c.

What is the earnings per share (EPS) projection for 2016? d. How many common shareholders were there? e. What were the book value per share and EPS in 2014? f.

LO5 8. Choosing an online broker. based on Exhibit 11.3, which online broker do you believe would be best for you? Explain your rationale. LO6 9. Tracking portfolio performance. Use Worksheet 11.2 to help luke and lillian Dobbins, a married couple in their early 30s, evaluate their securities portfolio, which includes these holdings.

a. IBM. (NYSE; symbol IBM): 100 shares bought in 2011 for \$170.40 per share. b. Procter & Gamble (NYSE; symbol PG): 150 shares purchased in 2010 at \$61.85 per share. c. Google (NASDAQ; symbol, GOOG): 200 shares purchased in 2014 at \$519.98 per share. d. The Dobbins also have \$8,000 in a one-year CD they bought one year ago, which pays 1.

25 percent annual interest. 1. Based on the latest quotes obtained from the Internet, complete Worksheet 11.2. Consider using an online portfolio tracker like the one provided by Google (www.google.com/finance/portfolio). 2.

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