Quantitative Review for Stock Market Assessment Test

Personal Finance Mr. Carbone

The Stock Market By The Numbers

Name: ______

1. If there are 5,000,000 shares of PineApple Computer outstanding and its current

market price in $40 per share, what is its market capitalization? $200,000,000. If

you own 100 shares of PineApple, what is the total value of your shares? $4,000.

2. Three years ago you bought 100 shares of Dull Computer for $50 a share. You

are now going to sell your shares at the current price of $100 a share. What

would be the capital gain on your investment? $5,000.

3. Macrosoft Corporation had net earnings of $1,500,000 last year. The company

has 300,000 shares outstanding. The current price of the stock is $50 per share.

What is Macrosoft’s:

a. Earnings Per Share? $5.00 per share

b. Price-Earnings Ratio? 10 times (based on $50/$5)

4. Assume you want to buy 300 shares of InDel Corporation which now selling for

$70 per share. However, you believe it is too expensive at this price. What

might you do? Place a limit buy order at $65, place a limit buy at $75, place a

stop order at $65, or a stop order at $75? Place a limit buy order at $65.

5. If you own 200 shares of Able Computer that you purchased at $70 per share.

Assume the stock is trading at $61 per share. If you wanted to place a stop order

to limit your losses, at which of the following prices might you place your stop

order: $75, $65, or $55? $55.