Section PF.4 – Practice Problems

1. Procter & Gamble Company Intel Corporation Stock Listing

a. What were the high and low prices for the past 52 weeks?

b. If you owned 250 shares of Procter & Gamble Company stock last year, what total dividend did you receive?

c. What is the annual return for dividends alone? How does this compare to a bank account offering a 1.65% annual percentage yield?

d. How many shares of Procter & Gamble Company were traded yesterday?

e. What were the high and low prices for Procter & Gamble Company shares yesterday?

f. What was the price at which Procter & Gamble Company shares traded when the stock exchange closed yesterday?

g. What was the closing price two days ago?

h. Compute Procter & Gamble Company’s annual earnings per share using:

Annual Earnings Per Share = [latex]\frac{Yesterday's~closing~price~per~share}{PE~ratio}[/latex]

2. Johnson & Johnson Stock Listing

a. What were the high and low prices for the past 52 weeks?

b. If you owned 890 shares of Johnson & Johnson stock last year, what total dividend did you receive?

c. What is the annual return for dividends alone? How does this compare to a bank account offering a 0.03% annual percentage yield?

d. How many shares of Johnson & Johnson were traded yesterday?

e. What were the high and low prices for Johnson & Johnson shares yesterday?

f. What was the price at which Johnson & Johnson shares traded when the stock exchange closed yesterday?

g. What was the closing price two days ago?

h. Compute Johnson & Johnson’s annual earnings per share using:

Annual Earnings Per Share = [latex]\frac{Yesterday's~closing~price~per~share}{PE~ratio}[/latex]

For problems 3-10, use the Mastercard Incorporated Stock table to answer the questions.

3. Will owns 40 shares that he bought at the year low price. If he sold 30 of those shares yesterday at the day’s closing price, how much total money did he gain or lose on the 30 shares that he sold?

4. Amaya owns 490 shares which she bought at the year high price. If she sold 120 of those shares yesterday at the day’s closing price, how much total money did she gain or lose on the 120 shares that she sold?

5. Yesterday, Angelina bought 800 shares at the daily high, if she sold all the shares yesterday at the daily low, what was her total gain or loss?

6. Yesterday, Anthony bought 1300 shares at the daily low, if he sold all the shares yesterday at the daily high, what was his total gain or loss?

7. Weldon was monitoring the price of Mastercard Incorporated. At the beginning of the month the stock was trading at $337.91 and at the end of the month it was trading at $339.35. What was the percent change of the stock from the beginning of the month to the end of the month? Round to the nearest tenth.

8. Jolie was monitoring the price of Mastercard Incorporated. At the beginning of the month the stock was trading at $327.89 and at the end of the month it was trading at $312.46. What was the percent change of the stock from the beginning of the month to the end of the month? Round to the nearest tenth.

9. Based on yesterday’s closing price, the total portfolio value of Vy’s Mastercard Incorporated stock is down 5.8%. What was her original purchase price?

10. Based on yesterday’s closing price, the total portfolio value of Bradly’s Mastercard Incorporated stock is up 4.7%. What was his original purchase price?

For problems 11-18, use the Visa Inc. Stock table to answer the questions.

11. Kenji purchased Visa stock yesterday at its low. How many whole shares was he able to buy with $20,000.00?

12. Aiden purchased Visa stock yesterday at its high. How many whole shares was he able to buy with $22,000.00?

13. Nathan purchased 100 shares of Visa at $198.33 using a broker that charged a 1.7% commission. Find the amount of commission Kirby was charged?

14. Adrian purchased 180 shares of Visa at $191.83 using a broker that charged 0.9% commission. Find the amount of commission Major was charged?

15. Peyton purchased 570 shares of Visa at $232.85 using a broker that charged 2.5% commission. What is the total cost for this transaction?

16. Clarissa purchased 110 shares of Visa stock at $195.12 using a broker that charged 1.8% commission. What is the total cost for this transaction?

17. Mr. Hamilton bought 150 shares of Visa at $204.22. He sold them yesterday at the high price.  What would be the gain or loss if he had sold it at the low price?

18. Mr. Harding bought 250 shares of Visa at $200.70. He sold them yesterday at the low price.  What would be the gain or loss if he had sold it at the high price?

19. An investor purchased 1250 shares of stock for $163.25 per share and sold them later for $169.28 per share. The broker’s commission was 1% of the purchase price and 1% of the selling price.  Find the amount the investor made or lost on the stock.

20. An investor purchased 980 shares of stock at $162.08 per share. She later sold it at $150.02. The broker’s commission on the purchase was 1.8% and 1.6% on the sale.  Find the amount of money the investor made or lost on the stock.

21. Suppose that you buy 800 shares of stock at $24.00 in a company that pays an annual dividend of $1.95 per share, then sell all your shares at $32.00 four years later. What would your profit be four years later?

22. Shares of stock reached a low of $2.51 on October 13, 2022. One year later, the stock closed at $10.14.  If you had invested $30,000.00 in the stock on 10/13/22, buying as many shares as possible (round the number of shares purchased to the nearest hundredth) while paying an online brokerage fee of $49.99 for the purchase, then sold the stock a year later with the same fee.  How much profit would you have made?

23. Mutual Fund A has 6.1% rate of return and a management fee of 0.8%. Mutual Fund B has a 5.6% rate of return and a management fee of 0.2%.  Which is a better investment?