Exam 1: A Brief History of Risk and Return

You purchased a stock for $46.70 a share and resold it one year later.Your total return for the year was 11.2 percent and the dividend yield was 2.8 percent.At what price did you resell the stock?

(Multiple Choice)

5.0/5

(81)

Question 21

Which one of the following should be used to compare the overall performance of three different investments?

(Multiple Choice)

4.9/5

(78)

Question 22

Which one of the following statements is correct?

(Multiple Choice)

4.9/5

(69)

Question 23

Which category(ies)of investments had an annual rate of return that exceeded 100 percent for at least one year during the period 1926-2012?

(Multiple Choice)

4.9/5

(72)

Question 24

Blume's formula is used to:

(Multiple Choice)

4.7/5

(77)

Question 25

You invested $5,000 eight years ago.The arithmetic average return on your investment is 10.6 percent and the geometric average return is 10.23 percent.What is the value of your portfolio today?

(Multiple Choice)

4.8/5

(78)

Question 26

For the period 1926-2012,long-term government bonds had an average return that the average return on long-term corporate bonds while having a standard deviation that _ the standard deviation of the long-term corporate bonds.

(Multiple Choice)

4.9/5

(89)

Question 27

Last year,ABC stock returned 11.4 percent,the risk-free rate was 3.2 percent,and the inflation rate was 2.8 percent.What was the risk premium on ABC stock?

(Multiple Choice)

4.8/5

(76)

Question 28

The average risk premium on large-company stocks for the period 1926-2012 was:

(Multiple Choice)

4.8/5

(86)

Question 29

Over the past four years,Hi-Tech Development stock returned 35.2,38.8,18.4,and -32.2 percent annually.What is the arithmetic average return?

(Multiple Choice)

4.9/5

(84)

Question 30

Jim began his investing program with a $4050 initial investment.The table below recaps his returns each year as well as the amounts he added to his investment account.What is his dollar-weighted average return?

(Multiple Choice)

4.8/5

(84)

Question 31

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% return the first year,he added $3,000 to his portfolio.In this year his investments lost 5%.Undeterred,Bill added $2,000 the next year and earned a 2% return.Last year,discouraged by the recent results,he only added $500 to his portfolio,but in this final year his investments earned 8%.What was Bill's dollar-weighted average return for his investments?

(Multiple Choice)

4.9/5

(90)

Question 32

A stock produced annual returns of 5,-21,11,42,and 4 percent over the past five years,respectively.What is the geometric average return?

(Multiple Choice)

4.9/5

(81)

Question 33

The geometric return on a stock over the past 10 years was 7.9 percent.The arithmetic return over the same period was 8.8 percent.What is the best estimate of the average return on this stock over the next 5 years?

(Multiple Choice)

4.9/5

(80)

Question 34

Shane purchased a stock this morning at a cost of $13 a share.He expects to receive an annual dividend of $.27 a share next year.What will the price of the stock have to be one year from today if Shane is to earn a 8 percent rate of return on this investment?

(Multiple Choice)

4.8/5

(93)

Question 35

Stacey purchased 300 shares of Coulter Industries stock and held it for 4 months before reselling it.What is the value of "m" when computing the annualized return on this investment?

(Multiple Choice)

4.8/5

(102)

Question 36

One year ago,you purchased 400 shares of stock at a cost of $8,650.The stock paid an annual dividend of $1.10 per share.Today,you sold those shares for $23.90 each.What is the capital gains yield on this investment?

(Multiple Choice)

4.9/5

(65)

Question 37

A stock has an average historical risk premium of 5.6 percent.The expected risk-free rate for next year is 2.4 percent.What is the expected rate of return on this stock for next year?

(Multiple Choice)

4.8/5

(83)

Question 38

A stock has an average historical return of 11.3 percent and a standard deviation of 20.2 percent. Which range of returns would you expect to see approximately two-thirds of the time?

(Multiple Choice)

4.8/5

(87)

Question 39

The rate of return earned on a U.S.Treasury bill is frequently used as a proxy for the:

(Multiple Choice)

5.0/5

(81)

Question 40

Showing 21 - 40 of 100

You purchased a stock for $46.70 a share and resold it one year later.Your total return for the year was 11.2 percent and the dividend yield was 2.8 percent.At what price did you resell the stock?

Which one of the following should be used to compare the overall performance of three different investments?

Which one of the following statements is correct?

Which category(ies)of investments had an annual rate of return that exceeded 100 percent for at least one year during the period 1926-2012?

Blume's formula is used to:

You invested $5,000 eight years ago.The arithmetic average return on your investment is 10.6 percent and the geometric average return is 10.23 percent.What is the value of your portfolio today?

For the period 1926-2012,long-term government bonds had an average return that the average return on long-term corporate bonds while having a standard deviation that _ the standard deviation of the long-term corporate bonds.

Last year,ABC stock returned 11.4 percent,the risk-free rate was 3.2 percent,and the inflation rate was 2.8 percent.What was the risk premium on ABC stock?

The average risk premium on large-company stocks for the period 1926-2012 was:

Over the past four years,Hi-Tech Development stock returned 35.2,38.8,18.4,and -32.2 percent annually.What is the arithmetic average return?

Jim began his investing program with a $4050 initial investment.The table below recaps his returns each year as well as the amounts he added to his investment account.What is his dollar-weighted average return?

A stock produced annual returns of 5,-21,11,42,and 4 percent over the past five years,respectively.What is the geometric average return?

The geometric return on a stock over the past 10 years was 7.9 percent.The arithmetic return over the same period was 8.8 percent.What is the best estimate of the average return on this stock over the next 5 years?

Shane purchased a stock this morning at a cost of $13 a share.He expects to receive an annual dividend of $.27 a share next year.What will the price of the stock have to be one year from today if Shane is to earn a 8 percent rate of return on this investment?

Stacey purchased 300 shares of Coulter Industries stock and held it for 4 months before reselling it.What is the value of "m" when computing the annualized return on this investment?

One year ago,you purchased 400 shares of stock at a cost of $8,650.The stock paid an annual dividend of $1.10 per share.Today,you sold those shares for $23.90 each.What is the capital gains yield on this investment?

A stock has an average historical risk premium of 5.6 percent.The expected risk-free rate for next year is 2.4 percent.What is the expected rate of return on this stock for next year?

A stock has an average historical return of 11.3 percent and a standard deviation of 20.2 percent. Which range of returns would you expect to see approximately two-thirds of the time?

The rate of return earned on a U.S.Treasury bill is frequently used as a proxy for the:

The Investment Process

Overview of Security Types

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

Projecting Cash Flow and Earnings

Corporate and Government Bonds

Global Economic Activity and Industry Analysis

Mortgage-Backed Securities

Filters

Exam 1: A Brief History of Risk and Return

You purchased a stock for $46.70 a share and resold it one year later.Your total return for the year was 11.2 percent and the dividend yield was 2.8 percent.At what price did you resell the stock?

Which one of the following should be used to compare the overall performance of three different investments?

Which one of the following statements is correct?

Which category(ies)of investments had an annual rate of return that exceeded 100 percent for at least one year during the period 1926-2012?

Blume's formula is used to:

You invested $5,000 eight years ago.The arithmetic average return on your investment is 10.6 percent and the geometric average return is 10.23 percent.What is the value of your portfolio today?

For the period 1926-2012,long-term government bonds had an average return that ______ the average return on long-term corporate bonds while having a standard deviation that _______ the standard deviation of the long-term corporate bonds.

Last year,ABC stock returned 11.4 percent,the risk-free rate was 3.2 percent,and the inflation rate was 2.8 percent.What was the risk premium on ABC stock?

The average risk premium on large-company stocks for the period 1926-2012 was:

Over the past four years,Hi-Tech Development stock returned 35.2,38.8,18.4,and -32.2 percent annually.What is the arithmetic average return?

Jim began his investing program with a $4050 initial investment.The table below recaps his returns each year as well as the amounts he added to his investment account.What is his dollar-weighted average return?

A stock produced annual returns of 5,-21,11,42,and 4 percent over the past five years,respectively.What is the geometric average return?

The geometric return on a stock over the past 10 years was 7.9 percent.The arithmetic return over the same period was 8.8 percent.What is the best estimate of the average return on this stock over the next 5 years?

Shane purchased a stock this morning at a cost of $13 a share.He expects to receive an annual dividend of $.27 a share next year.What will the price of the stock have to be one year from today if Shane is to earn a 8 percent rate of return on this investment?

Stacey purchased 300 shares of Coulter Industries stock and held it for 4 months before reselling it.What is the value of "m" when computing the annualized return on this investment?

One year ago,you purchased 400 shares of stock at a cost of $8,650.The stock paid an annual dividend of $1.10 per share.Today,you sold those shares for $23.90 each.What is the capital gains yield on this investment?

A stock has an average historical risk premium of 5.6 percent.The expected risk-free rate for next year is 2.4 percent.What is the expected rate of return on this stock for next year?

A stock has an average historical return of 11.3 percent and a standard deviation of 20.2 percent. Which range of returns would you expect to see approximately two-thirds of the time?

The rate of return earned on a U.S.Treasury bill is frequently used as a proxy for the:

The Investment Process

Overview of Security Types

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

Projecting Cash Flow and Earnings

Corporate and Government Bonds

Global Economic Activity and Industry Analysis

Mortgage-Backed Securities

Filters

For the period 1926-2012,long-term government bonds had an average return that the average return on long-term corporate bonds while having a standard deviation that _ the standard deviation of the long-term corporate bonds.