Exam 1: A Brief History of Risk and Return

Downtown Industries common stock had returns of 7.2, 11.5, 10.5, and 7.5 percent, respectively, over the past four years. What is the standard deviation of these returns?

If you multiply the number of shares outstanding for a stock by the price per share, you are computing the firm's:

Eight months ago, you purchased 300 shares of a non-dividend paying stock for $27 a share. Today, you sold those shares for $31.59 a share. What was your annualized rate of return on this investment?

The risk-free rate is:

An annualized return:

A portfolio had an original value of $7,400 seven years ago. The current value of the portfolio is $11,898. What is the average geometric return on this portfolio?

Jimmy purchased a stock for $22.22 a share, received a dividend of $.55 a share, and sold the stock after one year for $25.36 a share. What was his dividend yield on this investment?

A stock produced annual returns of 8.3, −21, 12, 42, and 9 percent over the past five years, respectively. What is the geometric average return?

Bill has been adding funds to his investment account each year for the past 3 years. He started with an initial investment of $1,000. After earning a 10 percent return the first year, he added $3,000 to his portfolio, but his investments lost 5 percent. Undeterred, Bill added $2,000 the next year and earned a 2 percent return. Last year, discouraged by the recent results, he only added $500 to his portfolio, but in this final year his investments earned 8 percent. What was Bill's dollar-weighted average return for his investments?

Based on the period 1926-2018, the risk premium for U.S. Treasury bills was:

The geometric return on an investment is approximately equal to the arithmetic return:

Which one of the following had the narrowest bell curve for the period 1926-2018?

The average compound return earned per year over a multi-year period is called the:

An asset has an average historical rate of return of 13 percent and a variance of .0106. What range of returns would you expect to see approximately two-thirds of the time?

Tom decides to begin investing some portion of his annual bonus, beginning this year with $6,000. In the first year he earns an 8 percent return and adds $3,000 to his investment. In the second his portfolio loses 4 percent but, sticking to his plan, he adds $1,000 to his portfolio. In this year his portfolio returns 2 percent. What is Tom's dollar-weighted average return on his investments?

A stock has an average arithmetic return of 10.55 percent and an average geometric return of 10.41 percent based on the annual returns for the last 15 years. What is projected average annual return on this stock for the next 10 years?

Which one of the following is considered the best method of comparing the returns on various-sized investments?

Leeanne owns a stock that has an average geometric return of 12.30 percent and an average arithmetic return of 12.55 percent over the past six years. What average annual rate of return should Leeanne expect to earn over the next four years?

The dividend yield is defined as the annual dividend expressed as a percentage of the:

For the period 1926-2018, the annual return on large-company stocks: