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308. The Market Value of stocks is the price at which they sell. Stocks are at a premium when the market value is above par, and at a discount when the market value is below par.

309. A Stock Certificate is a document signed by the officers of a corporation specifying the number of shares owned by the holder.

310. A Dividend is a sum divided among the stockholders as the profits of the business.

311. An Assessment is a sum required of the stockholders to meet the losses or expenses of the business.

312. The market value of leading stocks and bonds at commercial centers is given in the daily papers. The following is an extract:

Stock Quotations. 5 Union Pacific . . . . . . 1184 | U. S. 4's reg. ...... 116 60 N. Y. Central ..... 1463 U. S. 4's coup. ...... 1164 200 Erie R. R. ...... 478 $ 1000 Mass. 5's '94 .... 1163 114 Am. Bell Telephone . . . 132 $ 5000 Pacific 6's '95 ... : 130 13 Continental Mills. ... 901 $ 5000 Ogd's & Lake C. 6's . . 97 2 Exchange Bank ..... 145 $10000 N. Y. Central 6's '83 . 1064 50 Eastern R. R. . . . . . 421 / $5000 Hartford & Erie 7's .. 63

313. Brokerage is computed on the par value of stocks, and the usual rate is either % or } %.

314. The rules of percentage and interest already given apply to stocks, the premium, discount, dividend, and assessment being always a percentage of the par.

7. What must be paid for $ 5000 Union Pacific Railroad Bonds at 114, brokerage 1 %?

Solution. — 114% + 1% =. 1144%, and 1144 % of $ 5000 = $5712.50, Ans. Come

8. What will 20 shares of New Jersey Central Railroad cost, at 1024, brokerage } %?

9. How much, including brokerage at $%, must be paid for $ 30000 of U. S. 4's at 113! ?

10. When gold is at 101), what is the value in currency of $ 1250 in gold ?

11. When the cost of 20 shares of the Atlantic National Bank, including 1% brokerage, is $ 2200, what is the market value per share ?

Solution. $ 100 x 20 = $ 2000, par value. 1% of $ 2000 = $5.00, the brokerage. $ 2200 – $ 5 = $ 2195, the market value. $ 2195 • 20 = $ 109.75, the market value of 1 share.

12. When the cost of 25 shares of the Adams Express Company, including brokerage at 3%, is $3206.25, what is the market value per share ?

13. When gold is at 101%, what is the value in gold of $ 126.75 in currency ? .

14. How should Pacific Railroad bonds be quoted when 10 hundred-dollar bonds cost, including brokerage 4%, $ 1302.50 ?

15. What income will be realized from investing $ 1905 in 6 % stock bought at 95, allowing { % for brokerage ?

Solution.
$ 1905 • .954 = $ 2000, par value.

$ 2000 x .06 = $ 120, yearly income. 16. What will be the income from investing $ 2650 in State 5's at 1052, brokerage 1 %?

17. How much can be realized yearly from an investment of $ 6900 in a 41 % stock, bought at 86, brokerage 1 %?

18. Which will yield the greater income in amount, City 6's, at 1054, purchased for $2650, or State 5's at 1044, purchased for $ 3135, brokerage in both cases being 1 %?

19. How much must be invested in 5% stock, purchased at 103, to afford an income of $800 ?

Solution.
$ 800 = .05 = $ 16000, par value of stock.
$ 16000 x 1.03 = $ 16480, amount to be invested.

20. How much must I invest in Government 41's at 1051, to secure annually $ 900 ?

21. How much must be invested in 7% railroad bonds at 1083, brokerage & %, to afford an income of $ 1050 per annum ?

22. What sum must be invested in U. S. 5 % bonds of $ 500 each, at 1083, brokerage 1 %, to secure a yearly income of $ 2500 ?

23. When a 6% stock is at 952, brokerage 1 %, what rate of income on the investment will the stock yield ?

Solution. — The annual income of a share of 6% stock is $ 6. If the cost is $ 96, the income is one, or to, or 64%, of the cost.

24. What is the rate of income on Railroad 5's at 110, no allowance for brokerage ?

25. Which will yield the greater per cent income, Railroad 6's bought at 120, or 5 % stock bought at 105 ?

26. What per cent income will land-grant 8's purchased at 125 yield ?

27. How much must be paid for a 5% stock that the in vestment shall yield 6% ?

Solution. — A 5% stock yields $5 on an investment of $ 100. But if the $ 5 is 6% of the investment, 1% of it is of $5, and 100 % of the investment 100 x 5 of $5, or $ 83}.

28. How much must I pay for Railroad 6's, that my investment shall yield 7 %?

29. At what price must I purchase 8% stock that the investment shall pay 6 %?

EXCHANGE.

315. 1. How can you pay a creditor in New Orleans $ 800 without actually sending him the money ?

2. What will an order of John Hall of Chicago on Abram Brown of New York for $ 300 cost, payable at sight, if % premium is charged for it?

3. What will an order for $ 250, payable at sight, cost, if purchased at } % discount?

316. A Draft is a written order for the payment of money, made in one city or town, and payable in another.

317. The Drawer is the maker of a draft; the Drawee, the party to whom it is addressed; and the Payce, the party to whom it is payable.

318. A Sight Draft is a draft payable on presentation to the drawee.

319. A Time Draft is a draft payable at a time named after presentation, or after date.

320. Form of a Sight Draft. 1000.

Rochester, Jan. 5, 1882. At sight pay to the order of William P. Johnson one thousand dollars, and charge to the account of

Thomas Prince of Co. To Andrew Alston, Philadelphia. .

321. If the drawee agrees to pay the money specified in the draft, on its presentation he writes his name under the word “ Accepted” across its face. This act is called the Acceptance of the draft.

322. Exchange is the method of making payments by means of drafts.

The exchange is at par when a draft sells for its face. Three days of grace are usually allowed on time drafts.

DOMESTIC EXCHANGE.

323. Domestic Exchange is between persons in the same country.

WRITTEN EXERCISES. 4. What is the cost of a sight draft for $452 at 14% discount?

Solution
$ 452 x 0.015 = $6.78, discount.

$ 452 – $6.78 = $ 445.22, cost of the draft. 5. What is the cost of a draft on New York for $ 1164 at 1% premium?

6. How much must be paid for a draft on St. Louis for $ 4000 at 21 % discount ?

7. What is the cost of a draft of the Girard National Bank, Philadelphia, on the National Bank of Commerce, Boston, for $ 2517.70 at $ % premium?

8. Find the face of the draft at 11 % discount that can be bought for $ 445.22.

Solution.

$1 – $0.015 = $0.985, cost of $1 of draft.

$ 445.22 = 0.985 = $ 452, face of the draft. · 9. How large a draft at $ % premium can be bought for $ 2520.84 ?

10. Bought a draft, at 21 % discount, for $3900. What was its face?

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