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422. United States Government Securities are of two kinds, viz: bonds which are to be paid at a specified time, and bonds which are to be paid at a fixed date, or some earlier specified time at the option of the Government.

Bonds are sometimes designated by combining the rate of interest and the time of payment. Thus, bonds that pay 6% interest and are payable in 1881, are called 6's of '81.

When the rate is uniform. for a class of bonds it is omitted, and the time of redemption and payment only are given. Thus, bonds that

may be redeemed in five years, and are payable in twenty years, are called 5-20's, those redeemable in ten years and payable in 'forty years are called 10-40's.

The 4% consols are the bonds of the consolidated loan. They are redeemable after 30 years from July 1, 1877.

The bonds issued by States, counties, etc., are name from the rate of interest they bear. Thus, New Hampshire bonds that bear 6% interest are called New Hampshire 6's.

All bonds of the United States are payable in coin at maturity,

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The various classes of United States bonds are:
1. 6's of '81. Interest payable semi-annually in coin.

2. 5–20's, issued in 1862, '64, 265, '67, '68. Interest payable semiannually in coin at 6%.

3. 10-40's, issued in 1864. Interest payable in coin semi-annually, at 5% on $500 and $1000 bonds, and annually on $50 and $100 bonds.

4. 5's of '81. Interest payable quarterly in coin. 5. 4}'s of '86. Interest. payable quarterly in coin. 6. 4's of 1901. Interest payable quarterly in coin. 7. 4% consols. Interest payable quarterly in coin.

423. Stocks is a term which includes the stock of a corporation, the various U, S., State, and county bonds, etc.

424. A Stock-broker is a person whose business it is to buy and sell stocks.

425. Brokerage is the compensation allowed a broker for buying and selling stocks.

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426. The computations in stocks involve the same elements as the fundamental problems in Percentage. The corresponding terms are:

1. The Par Value of the stock is the Base.
2. The Rate of Premium, or Discount is the Rate.
3. The Premium or Discount is the Percentage.
4. The Market Value is the Amount, or Difference.
427. PRINCIPLE.-

Brokerage is computed on the par value of the stock.

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EXERCISES.

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1. What is the cost of $1000 Delaware, Lackawanna, ani Western R. R. bonds at 108 when 1% additional is paid for buying?

2. A broker received $2510 to invest in first mortgag 3 bonds at a premium of 25%. If he charged 1% brokerage, how many

bonds of $100 each did he buy? 3. A broker invested $26000 in quicksilver stocks at 121, charging 4% brokerage. How many shares did he buy?

4. A man invested $5125 in Union Pacific R. R. bonds at $102, paying 1% brokerage. How many bonds of $1000 each did he buy?

5. A man bought a number of shares of bank-stock at 125 and sold it at 128, gaining $300. How many shares did he buy?

6. Bought bonds at 115 and sold them at 110, losing $300. How many bonds of $1000 each did I buy?

7. How much must I invest in Missouri State bonds at par,

which pay 6% interest to secure an income of $1200 annually?

8. What sum must I invest in stock at par paying an annual dividend of 8% to realize an income of $4800 yearly ?

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9. What per cent. on the investment does 6% stock yield if it is bought at half its par value? If at 1 of its par value?

10. What per cent. does stock pay, if it yields an annual dividend of 4% and is bought at 50% of its par value ?

11. How much must I pay a share for stock, which yields an annual dividend of 6%, so that I may realize 12% on my money annually? 18%? 24%? 30%?

12. For what price must bonds bearing 9% interest be bought, so that 12% may be realized annually? 6%?

13. How much currency can be obtained for $100 in gold, when gold is at a premium of 4%? 9%? 12%?

14. How much currency can be obtained for $100 in gold, when gold is at a premium of 10%? 100%? 150%? 5%?

15. How much gold at 6% premium can I buy with $106 in currency? With $318? With $159 ?

16. When gold is at a premium of 20%, how much gold is $1 in currency worth. How much when gold is at 50% premium?

17. When gold is selling at 125, what is the value in gold of a United States greenback for $10?

WRITTEN EXERCISES.

PROCESS.

428. 1. What is the cost of 500 shares Delaware and Hudson Canal Co. stock at 501, brokerage #%?

ANALYSIS. Since 501% +1% =503%

504% of the par value

of the stock is the 509% of $100=$50.75, cost of 1 share. price paid for it, the $50.75 X 500= $25375, the entire cost. entire cost of the

stock, including the rate for brokerage, is 50% of the par value of the stock. And, since the par

value of a share of the stock is $100, the cost of a share will be 50% of $100, or $50.75, and the cost of 500 shares of the stock will therefore be 500 times $50.75, or $25375.

RULE.—Since the same elements are involved as in the fundamental problems in Percentage, the rules are the same.

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FORMULAS.

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1. Premium or Discount = Par Value X Rate.
2. Rate Premium or Discount = Par Value.
3. Par Value = Premium or Discount : Rate.
4. Par Value Market Value :

1 (1 + Rate).

(1— Rate).

+ Premium. 5. Market Value Par Value

Discount.

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2. Find the cost of 125 shares Union Pacific R. R. stock, at 681, brokerage 1%?

3. What will $8000 U. S. 5-20's, coupon bonds of '65, cost at 1084, brokerage %?

4. How much will 55 shares C. C. C. & I. R. R. stock cost at 283, brokerage 4%?

5. What must be paid for $5000 U. S. 10-40's. at 81% premium, brokerage %?

6. Bought 35 shares N. Y. C. & H. R. R. R. stock at 86], and sold them at 81% advance. How much did I gain?

7. Sold 135 shares railroad stock at a discount of 154%, paying % brokerage. How much did I receive for it?

8. How many shares of bank-stock at 5% discount. can be purchased for $3810, if 1% is paid for brokerage ?

ANALYSIS.

Since the stock was 100% – 5%=95%+*%=951%

bought at 5% dis$3810=.951=84000, or 40 shares. count it was bought

at 95% of its par value, but the brokerage increased the cost 1%, so that each dollar's worth of stock cost 951% of its par value, or $.95). Therefore, as many dollars worth can be bought for $3810 as $.951 is contained times in $3810, which is 4000 times, or 40 shares can be bought.

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PROCESS,

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9. Find the number of shares of R. R. stock at 1025, which can be bought for $2575, brokerage 8%.

10. How many shares of N. Y. C. & H. R. R. R. stock at 98, can be bought for $28710, brokerage 1%?

11. How many shares of C. B. & Q. R. R. stock at 1097, can be bought for $66075, brokerage #%?

12. How many shares of Hartland Ferry stock at 4% discount, can be bought for $3330.25, brokerage 1% ?

13. How many shares of R. R. stock at 3% discount, can be bought for $2150.50, brokerage 1%?

14. What income will be realized from investing $4196.25 in 5% stock purchased at 93, allowing 1% for brokerage?

ANALYSIS.

Since the stock $4196.25+.931=$ 4500, the par value.

cost 937% of $4500 X.05=$225, annual income. its par value,

PROCESS.

every dollar's

worth cost $.93}; and as many dollars' worth can be bought for $4196.25 as $.931 is contained times in that sum, which is 4500 times; and since the stock paid 5% income, the entire income from $4500 is 5% of $4500, which is $225.

15. How much income will I receive annually by investing $1299 in 6% stock purchased at 37%, allowing % brokerage?

16. What will be the income from investing $4696.25 in Crawford Co, 6's at 45, brokerage 1%.

17. Which is more profitable, and how much, to invest $5000 in 6% stock purchased at 75%, or 5% stock purchased at 60%?

18. U. S. 5-20's pay 6% interest in gold. What will be ту income in currency by investing $11212.50 at 1125, when gold is quoted at 67% premium?

19. Which is more profitable, to buy 6% bonds, purchased at 90, interest payable in currency; or 5% bonds, purchased

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