Which of the following transactions are exempt?

XYZ Corp., a local manufacturing firm, sells its common stock to several local individual accredited investors on an infrequent or isolated basis.

Joe Smith, an agent with ABC Securities, Inc., sells XYZ Corporation's 5-year fixed income securities, rated AAA by Standard & Poor's, on a regular basis to selected members of his large retail client base.

Joe Smith, an agent with ABC Securities, Inc., sells XYZ Corporation's securities to a high-net worth client on an unsolicited basis.

Alexander Wimpton had his sizable portfolio of stocks and bonds sold by the administrator of his estate upon his death.

A) I and IV.

B) I and II.

C) III and IV.

D) II and III. A complex trust has the following income for the year: $1,500 in taxable interest, $2,000 in dividends (reinvested in the stock), and $3,000 in tax-exempt interest. In addition, the portfolio realized $3,500 in capital gains that were reinvested in the corpus. What is the distributable net income (DNI) for the trust?

A) $4,500.

B) $6,500.

C) $10,000.

D) $1,500. A

To answer this question without using a complex financial calculator, use the Rule of 72. This rule allows us to calculate the annual compounded growth rate that it would take for funds to double in value, given a specific number of years. The rule also tells us how many years it will take for funds to double in value, given the annual compounded growth rate. In this example, the investor purchased $2,500 worth of XYZ. Ten years later the investment had increased to $10,000. This means the investment doubled twice in ten years ($2,500 to $5,000, and from $5,000 to $10,000). In other words, the investment doubles once every five years. Using the Rule of 72, divide 72 by 5 to determine the annual growth rate. 72 / 5 = 14.4% which is rounded to 14%. 11th EditionClaudia Bienias Gilbertson, Debra Gentene, Mark W Lehman1,012 solutions

10th EditionEugene F. Brigham, Joel Houston777 solutions

4th EditionDon Herrmann, J. David Spiceland, Wayne Thomas1,097 solutions

9th EditionAlan J. Marcus, Alex Kane, Zvi Bodie689 solutions