Q1 You own 1000 shares of Newstar Financial stock currently

Q1:

You own 1000 shares of Newstar Financial? stock, currently trading for $56 per share. You are offered a deal where you can exchange these stocks for 900 shares of Amback Financial Group? stock, currently trading at $61 per share. What is the value of this? trade, if you choose to make? it?

A. -$1,100

B. -1,140

C. $1,100

D.-1,120

Q2:

Q3:

Stella deposits $4,600 in a savings account at a bank that offers interest of 5% on such accounts. What is the value of the money in her savings account in one year\'s time? O A. $6,762 ? B. $4,830 OC. $230 O D. $4,381

Solution

q1.A-$1100.

q2.$4,830.

amount in one year = deposit amount * (1+r)^n

=>$4600*(1.05)^1

=>$4,830.

q3.A.$88,160.

future value = amount * (1+r)^n

=>$60,000*(1.08)^5

=>$60,000 * 1.4693

=>$88,160.....(rounded off to nearest dollar).

value of incoming shares (900*$61)	$54,900
less:value of outgoing shares (1000*$56)	(56,000)
value of this trade	-1,100