1. A basic knowledge of finance will help you with your personal investments by helping you understand
A. how to accurately predict changes in the short-term interest rates
B. how to determine the optimal dividend policy for each firm
C. how to determine which technology is most likely to be accepted by consumers
D. how to review companies and industries to determine their prospects for future growth and the risk inherent in those companies and industries
E. how to predict the growth in sales for the firm
2. An investor buys a stock today for $26, receives a dividend of $2 at the end of the year and then sells the stock for $30. If the dividend is taxed at 40% and the capital gain at 20%, what is his return after tax?