$970.

(12)

LANSING, MICH., August 25, 1905. Six months after date, I promise to pay to the order of G. H. GRAHAM, Nine Hundred Seventy Dollars. Value received. Interest at 5% from date.

Discounted November 6, 1905, at 7%.

C. H. SMITH.

NOTE. Find the amount due at maturity, and compute the discount on this amount from November 6, to maturity.

$1280.

(18. JOINT. NOTE)

LOUISVILLE, KY., January 1, 1905.

Nine months after date, we promised to pay E. H. DURANT, or bearer, Twelve Hundred Eighty Dollars. Value received, with interest at 8% from date.

THOMAS SMAILS. J. D. PETERS.

Discounted July 15, 1905, at 6%.

(14. SEVERAL Note)

FREMONT, NEB., June 5, 1905.

$1968.40.

40

One year after date, either of us promises to pay R. D. ALLEN & Co., or order, Nineteen Hundred Sixty-eight 10 Dollars. Value received, with interest at 7%. Payable at the Merchants Bank.

Discounted April 1, 1906, at 10%.

$292.50.

G. H. MAHLER. O. A. PRESTON. J. B. Ross.

(15. JOINT AND SEVERAL NOTE)

CHICAGO, ILL., July 14, 1905.

Nine months and twelve days after date, we or either of us, promise to pay to the order L. P. DERN, Two Hundred NinetyDollars. Value received, with interest at 9%.

two

10%

50

J. F. SOMERS.

P. R. CORBIN.

Discounted January 1, 1906, at 8%.

A. C. WILSON.

16. Find the proceeds of a note of $275, bearing 6% interest, dated March 19, 1905, payable in 3 months; discounted April 16, at 8%.

17. I held B's note of $1760, bearing 10% interest, dated February 6, 1905, for 5 months, 10 days, and discounted same May 1, 1905, at 6%. How much did I receive from the bank?

18. A merchant who had a credit of $368.72 at the bank, had the proceeds of the following note placed to his credit: $628.80, bearing 8% interest, dated January 17, 1905, for 7 months, discounted April 2, 1905, at 8%. What was his credit then?

19. Lyman discounted a note of $1600, bearing 10% interest, dated April 3, 1905, for 10 months; discounted August 12, 1905, at 7%. How much was left after paying with the proceeds a note of $630, that had been on interest 2 years at 8% ?

20. For what sum must I give my note for 60 days to receive $600 proceeds, if the note is discounted at 8% ?

NOTE. Since the proceeds of $1 at 8% for 60 days is .9863 it will require as many dollars to produce $600 proceeds as .98623 is contained in $600 or $608.18.

21. I received $711 from a bank on a 90 days' note, at 5% discount. What was the face of the note?

22. What must be the face of a note for 105 days, to give $536.80 proceeds when discounted at 10%?

23. $1186.50 was the proceeds of a note, dated January 18 for 4 months, and discounted April 3, at 9%. What was the face?

24. The discount on a note, dated February 6 for 6 months, and discounted July 7 at 10% is $12.50. Find the face and the proceeds of the note.

NOTE. Divide the discount by the discount on $1, to find the face of the note.

25. Smith's note, dated March 1 for 4 mo. 15 days was discounted May 2 at 7%. What was the face of the note, if the discount was $5.25?

26. I received $581.55 at the bank for days. The bank charged me 8% discount. of the note?

my note due in 90 What was the face

27. For what sum must I give my note at the bank for 2 mo. 9 da. to receive $1176, if the bank charges 9% discount?

STOCKS AND BONDS

380. Stocks represent the capital or property of an incorporated company.

381. An Incorporated Company is an association authorized by law to transact business as a single individual.

382. A Charter is a legal instrument defining the powers and duties of a corporate body.

383. The Capital Stock is the funds or capital of the corporation.

384. A Share is one of the equal parts of the stock. A share is usually $100, though it may be of any value agreed upon by the members of the corporation.

385. A Stock Certificate is a paper issued by a corporation stating the number of shares to which the holder is entitled, and the par value of each share.

386. The Par Value of stock is the value named in the certificate.

387. The Market Value of stock is the price per share for which it sells.

388. Stock is At Par when it sells for its face value.

389. Stock is Above Par when it sells for more than its face value, and Below Par when it sells for less than its face value.

390. Preferred Stock is that which takes preference over common stock in reference to dividends.

Preferred Stock is issued as a special inducement to raise money or to protect a certain class of shareholders who may have advanced money to relieve a company from embarrassment.

391. A Dividend is the sum paid to stockholders from the gains of the corporation.

392. Assessments are sums levied on stockholders to meet the expenses or losses of the corporation.

393. A Stock Broker is a person who buys and sells stock as an agent for others.

394. Brokerage is the sum paid to brokers for buying and selling stock.

395. Quotations of Stock are statements made giving the price at which stock is being bought and sold. Stock quoted at 105 is selling at 51% premium, at 87 is selling at 121% dis

count.

Margin is cash or other security deposited with a broker on account of either the purchase or sale of securities, and to protect him against loss in case the market price of the securities bought or sold varies so as to be against the interests of the customer. It is usually 10% of the par value of the stock.

NOTE. Brokers charge interest on the sums expended and purchase commission, and allow interest on the margins deposited, or preferably they charge interest on the debit balance.

A Bear is an operator who believes the market price of stocks will fall.
A Bull is an operator who believes the market price of stocks will ad-

vance.

NOTE.-Hence a bull will buy stocks in order to profit by the higher price at which he expects to sell, and a bear will sell in order to profit by the lower price at which he expects to buy.

Hypothecating stocks and bonds is depositing them as collateral security for money borrowed.

NOTE. The securities must be greater than the loan by at least 10% of their par value, and in every case by an amount equal to 20% of the amount of the loan. This excess is called the margin of the loan.

Watering Stock is increasing the number of shares of an incorporated company without a corresponding increase in their value.

A Corner is produced when one or more operators owning or controlling all the stock of a company are able to purchase still more for either immediate or future delivery. When they demand the stock, the sellers are unable to find it in the market.

396. A Bond is a written or printed obligation of a city, county, state, government or corporation, promising to pay a certain sum of money at a specified time.

The object of a bond is to secure payment of borrowed money. When a city, state, etc., borrows money it gives a Bond as a certificate of the indebtedness.

397. A Coupon Bond is one having interest certificates or coupons attached. They are transferable merely by delivery, and for this reason are preferred for purposes of investment.

398. A Registered Bond is one payable to the holder, and is registered in the books of the authority issuing it. It can be transferred by assignment only.

Bonds are named from the authority that issued them, their rate of interest, and their date of maturity. U. S. “4's of 1907” are bonds issued by the United States, bearing 4% interest and maturing in 1907. Chicago "3's of 1900" are bonds issued by the city of Chicago, bearing 3% interest and maturing in 1900.

399. Government Bonds were issued to secure the payment of money borrowed to meet the expenses of the civil war.

400. The Interest on bonds is usually paid quarterly or semiannually.

401. The Interest on Government (U. S.) bonds is payable in gold, and is reckoned by the method of exact interest.

402. The Interest on all bonds except U. S. bonds is payable in currency, and is reckoned by the method of common interest. 403. A Mortgage is a conveyance of real estate or other property, as a pledge to secure the payment of a certain debt.

When money is borrowed to build a railroad or for other purpose, the payment of the bonds is secured by a mortgage or deed of trust upon the real estate of the road made in favor of some bank or trust company as trustee.

Computations in Stocks and Bonds are based upon the principles of Percentage, and embrace five quantities, viz.: Par Value Base; Rate of Premium or Discount Rate; Premium or Percentage; Market Value above par Amount;

=

Discount

=

=

NOTE. The par value of all stocks and bonds in the following problems is $100 unless otherwise stated.

ORAL PROBLEMS

1. What is the par value of 25 shares of stock? 75 shares? 125 shares? 4 shares?

2. What is the par value of 50 half shares of stock? 25 shares? 75 shares? 125 shares?

3. What is the value of 40 quarter shares of stock? 50 shares? 75 shares?