Question 1

Which one of the following had the greatest volatility of returns for the period 1926-2018?

Accepted Answer

A) large-company stocks 
B) U.S. Treasury bills 
C) long-term government bonds 
D) small-company stocks 
E) long-term corporate bonds 
A) large-company stocks 
B) U.S. Treasury bills 
C) long-term government bonds 
D) small-company stocks 
E) long-term corporate bonds

Question 2

One year ago, you purchased 400 shares of stock at a cost of $5,000. The stock paid an annual dividend of $11.30 per share. Today, you sold those shares for $23.50 each. What is the capital gains yield on this investment?

Accepted Answer

A) 8.80% 
B) 9.96% 
C) 11.50% 
D) 12.7% 
E) 14.75% 
A) 8.80% 
B) 9.96% 
C) 11.50% 
D) 12.7% 
E) 14.75%

Question 3

Stacey purchased 300 shares of Coulter Industries stock and held it for 3 months before reselling it. What is the value of "m" when computing the annualized return on this investment?

Accepted Answer

A) .25 
B) .33 
C) .40 
D) 3.00 
E) 4.00 
A) .25 
B) .33 
C) .40 
D) 3.00 
E) 4.00

Question 4

You invested $6,000 six years ago. The arithmetic average return on your investment is 9.3 percent and the geometric average return is 9.57 percent. What is the value of your portfolio today?

Accepted Answer

A) $10,092 
B) $10,382 
C) $10,899 
D) $10,947 
E) $11,195 
A) $10,092 
B) $10,382 
C) $10,899 
D) $10,947 
E) $11,195

Question 5

A stock produced annual returns of 8.5, −18, 15, 17, and 12 percent over the past five years, respectively. What is the geometric average return?

Accepted Answer

A) 5.78% 
B) 6.04% 
C) 6.34% 
D) 7.21% 
E) 8.20% 
A) 5.78% 
B) 6.04% 
C) 6.34% 
D) 7.21% 
E) 8.20%

Question 6

An initial investment of $40,000 fifty years ago is worth $1,822,222 today. What is the geometric average return on this investment?

Accepted Answer

A) 7.47% 
B) 7.94% 
C) 9.25% 
D) 9.50% 
E) 11.08% 
A) 7.47% 
B) 7.94% 
C) 9.25% 
D) 9.50% 
E) 11.08%

Question 7

You purchased a stock eight months ago for $36 a share. Today, you sold that stock for $41.50 a share. The stock pays no dividends. What was your annualized rate of return?

Accepted Answer

A) 23.32% 
B) 23.77% 
C) 25.70% 
D) 26.03% 
E) 27.67% 
A) 23.32% 
B) 23.77% 
C) 25.70% 
D) 26.03% 
E) 27.67%

Which one of the following had the greatest volatility of returns for the period 1926-2018?

One year ago, you purchased 400 shares of stock at a cost of $5,000. The stock paid an annual dividend of $11.30 per share. Today, you sold those shares for $23.50 each. What is the capital gains yield on this investment?

Stacey purchased 300 shares of Coulter Industries stock and held it for 3 months before reselling it. What is the value of "m" when computing the annualized return on this investment?

You invested $6,000 six years ago. The arithmetic average return on your investment is 9.3 percent and the geometric average return is 9.57 percent. What is the value of your portfolio today?

A stock produced annual returns of 8.5, −18, 15, 17, and 12 percent over the past five years, respectively. What is the geometric average return?

An initial investment of $40,000 fifty years ago is worth $1,822,222 today. What is the geometric average return on this investment?

You purchased a stock eight months ago for $36 a share. Today, you sold that stock for $41.50 a share. The stock pays no dividends. What was your annualized rate of return?

The Investment Process

Overview of Security Tips

Mutual Funds and Other Investment Companies

The Stock Market

Common Stock Valuation

Stock Price Behavior and Market Efficiency

Behavioral Finance and the Psychology of Investing

Interest Rates

Bond Prices and Yields

Diversification and Risky Asset Allocation

Return, Risk, and the Security Market Line

Performance Evaluation and Risk Management

Futures Contracts

Stock Options

Option Valuation

Alternative Investments

Corporate and Government Bonds

Projecting Cash Flow and Earnings

Global Economic Activity and Industry Analysis

Mortgage-Backed Securities

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Exam 1: A Brief History of Risk and Return

Which one of the following had the greatest volatility of returns for the period 1926-2018?

One year ago, you purchased 400 shares of stock at a cost of $5,000. The stock paid an annual dividend of $11.30 per share. Today, you sold those shares for $23.50 each. What is the capital gains yield on this investment?

Stacey purchased 300 shares of Coulter Industries stock and held it for 3 months before reselling it. What is the value of "m" when computing the annualized return on this investment?

You invested $6,000 six years ago. The arithmetic average return on your investment is 9.3 percent and the geometric average return is 9.57 percent. What is the value of your portfolio today?

A stock produced annual returns of 8.5, −18, 15, 17, and 12 percent over the past five years, respectively. What is the geometric average return?

An initial investment of $40,000 fifty years ago is worth $1,822,222 today. What is the geometric average return on this investment?

You purchased a stock eight months ago for $36 a share. Today, you sold that stock for $41.50 a share. The stock pays no dividends. What was your annualized rate of return?

The Investment Process

Overview of Security Tips

Mutual Funds and Other Investment Companies

The Stock Market

Common Stock Valuation

Stock Price Behavior and Market Efficiency

Behavioral Finance and the Psychology of Investing

Interest Rates

Bond Prices and Yields

Diversification and Risky Asset Allocation

Return, Risk, and the Security Market Line

Performance Evaluation and Risk Management

Futures Contracts

Stock Options

Option Valuation

Alternative Investments

Corporate and Government Bonds

Projecting Cash Flow and Earnings

Global Economic Activity and Industry Analysis

Mortgage-Backed Securities

Filters