Exhibit 4.7 USE THE INFORMATION BELOW FOR THE FOLLOWING PROBLEM(S)

question 21

Multiple Choice

Exhibit 4.7
USE THE INFORMATION BELOW FOR THE FOLLOWING PROBLEM(S)
Shares of RossCorp stock are selling for $45 per share. Brokerage commissions are 2% for purchases and 2% for sales. The interest rate on margin debt is 6.25% per year. The maintenance margin is 30%.
-Refer to Exhibit 4.7. At the end of one year shares of RossCorp stock are selling for $35 per share and the company paid dividends of $0.85 per share. Assuming that you paid the full cost of the purchase, what is your rate of return if you sell RossCorp stock?

• A)-33.05%
• B)-23.42%
• C)23.42%
• D)33.05%
• E)-25.35%

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Definitions:

Adrenal Medulla

The inner part of the adrenal gland that secretes adrenaline and noradrenaline, hormones involved in the body's fight-or-flight response.

General Adaptation Syndrome

A three-phase response pattern to chronic stress, including alarm, resistance, and exhaustion stages, as identified by Hans Selye.

Adrenaline

A hormone and neurotransmitter released in response to stress, increasing heart rate, blood flow, and providing a boost of energy or "fight or flight" response.

Noradrenaline

A neurotransmitter and hormone involved in the body's response to stress, increasing heart rate, blood pressure, and blood sugar levels.