Exam 10: Risk and Return in Capital Markets

If asset A's return is exactly two times asset B's return,then following risk return tradeoff,the standard deviation of asset A should be ________ times the standard deviation of asset B.

The risk that inflation rates are likely to increase in the next year is an example of common risk.

Suppose you invested $150 in Tesla Motors one month ago.It paid a dividend of $1.55,and you sold it right after the dividend was paid for $162.What was your realized return from holding the stock?

Suppose you invested $55 in CIBC stock one month ago.Today,it paid a dividend of $0.35,and then you sold it for $56.25.What was the return on your investment?

Suppose you invested $60 in the Ishares Dividend Stock Fund (DVY)a month ago.It paid a dividend of $0.70 today and then you sold it for $65.What was your return on the investment?

Use the table for the question(s)below. Consider the following price and dividend data for Ford Motor Company: -Assume that you purchased Ford Motor Company stock at the closing price on December 31,2004 and sold it after the dividend had been paid at the closing price on January 26,2005.Your capital gains rate (yield)for this period is closest to:

The standard deviation for the return on an individual firm is closest to:

You purchase a 30-year,zero-coupon bond for a price of $20.The bond will pay back $100 after 30 years and make no interim payments.The annual compounded return (geometric average return)on this investment is:

Greg purchased stock in Bear Stearns and Co.at a price of $89 per share.The company was acquired by JP Morgan at a price of $10 per share.What is Greg's return on his investment?

What is the expected payoff for Big Cure's Blockbuster drug?

Suppose the quarterly arithmetic average return for a stock is 5% per quarter and the stock gives a return of 10% each over the next two quarters.The arithmetic average return over the six quarters is:

The standard deviation of returns of: I.small capitalization stocks is higher than that of large capitalization stocks. Which statement is TRUE?

Bombardier Inc had realized returns of -3%,-2%,-5%,and -7% over four quarters.What is the quarterly standard deviation of returns for Bombardier?

For large portfolios,investors should expect a higher return for higher volatility,but this does not hold true for individual stocks.

The S&P TSX Composite index delivered a return of 14.48%,24.13%,17.26% and 9.83% over four successive years.What is the arithmetic average annual return per year?

In general,it is possible to eliminate ________ risk by holding a large portfolio of assets.

Investors should earn a risk premium for bearing unsystematic risk.

Which of the following is a diversifiable risk?

Use the table for the question(s)below. Consider the following realized annual returns: -The average annual return on IBM from 1996 to 2005 is closest to:

Ivanhoe Energy Inc had realized returns of 5.5%,-3.6%,8%,and 7.5% over four quarters.What is the quarterly standard deviation of returns for Ivanhoe?