Exhibit 1-3 USE THE FOLLOWING INFORMATION FOR THE NEXT PROBLEM(S) The common stock of XMen had the following historic prices. \[\begin{array} { l l } \text { Time } & \text { Price of XMen } \\ \hline 3 / 01 / 2004 & 50.00 \\ 3 / 01 / 2005 & 47.00 \\ 3 / 01 / 2006 & 76.00 \\ 3 / 01 / 2007 & 80.00 \\ 3 / 01 / 2008 & 85.00 \\ 3 / 01 / 2009 & 90.00 \end{array}\] -Refer to Exhibit 1-3. What was your arithmetic mean annual yield for the investment in XMen?

A) 0.1462 B) 0.1247 C) 1.8 D) 0.40 E) 0.25 A) 0.1462 B) 0.1247 C) 1.8 D) 0.40 E) 0.25

Exhibit 1-3 USE THE FOLLOWING INFORMATION FOR THE NEXT PROBLEM(S) The common stock of XMen had the following historic prices. \[\begin{array} { l l } \text { Time } & \text { Price of XMen } \\ \hline 3 / 01 / 2004 & 50.00 \\ 3 / 01 / 2005 & 47.00 \\ 3 / 01 / 2006 & 76.00 \\ 3 / 01 / 2007 & 80.00 \\ 3 / 01 / 2008 & 85.00 \\ 3 / 01 / 2009 & 90.00 \end{array}\] -Refer to Exhibit 1-3. What was your geometric mean annual yield for the investment in XMen?

A) 0.25 B) 0.40 C) 1.8 D) 0.1247 E) 0.1462 A) 0.25 B) 0.40 C) 1.8 D) 0.1247 E) 0.1462

Exhibit 1-5 USE THE FOLLOWING INFORMATION FOR THE NEXT PROBLEM(S) Assume that during the past year the consumer price index increased by 1.5% percent and the securities listed below returned the following nominal rates of return. $\begin{array}{l} \text {Canadian T-bils } &2.75 \% \\ \text {Canadian corporate bonds } &4.75 \% \end{array}$ -Refer to Exhibit 1-5. If over the past 20 years the annual returns on the S&P 500 market index averaged 12% with a standard deviation of 18%, what was the coefficient of variation?

A) 0.6 B) 0.6% C) 1.5 D) 1.5% E) 0.66% A) 0.6 B) 0.6% C) 1.5 D) 1.5% E) 0.66%

Exhibit 1-8 USE THE FOLLOWING INFORMATION FOR THE NEXT PROBLEM(S) Assume that you hold a two stock portfolio. You are provided with the following information on your holdings. $\begin{array}{|l|l|l|l|} \hline \text { Stock } & \text { Shares } & \text { Price }(t) & \text { Price }(t+1) \\ \hline 1 & 15 & 10 & 12 \\ \hline 2 & 25 & 15 & 16 \\ \hline \end{array}$ -Refer to Exhibit 1-8. Calculate the HPY for Stock 2

A) 5% B) 6% C) 7% D) 8% E) 10% A) 5% B) 6% C) 7% D) 8% E) 10%

Exhibit 1-5 USE THE FOLLOWING INFORMATION FOR THE NEXT PROBLEM(S) Assume that during the past year the consumer price index increased by 1.5% percent and the securities listed below returned the following nominal rates of return. $\begin{array}{l} \text {Canadian T-bils } &2.75 \% \\ \text {Canadian corporate bonds } &4.75 \% \end{array}$ -Refer to Exhibit 1-5. If next year the real rates all rise by 10% while inflation climbs from 1.5% to 2.5%, what will be the nominal rate of return on each security?

A) 1.24% and 1.52% B) 1.35% and 3.52% C) 3.89% and 6.11% D) 3.52% and 3.89% E) 1.17% and 6.11% A) 1.24% and 1.52% B) 1.35% and 3.52% C) 3.89% and 6.11% D) 3.52% and 3.89% E) 1.17% and 6.11%

Exhibit 1-4 USE THE FOLLOWING INFORMATION FOR THE NEXT PROBLEM(S) You have concluded that next year the following relationships are possible: $\begin{array}{llc} \text { Economic Status } & \text { Probability } & \text { Rate of Return } \\ \hline \text { Weak Economy } & .15 & -5 \% \\ \text { Static Economy } & .60 & 5 \% \\ \text { Strong Economy } & .25 & 15 \% \end{array}$ -Refer to Exhibit 1-4. What is your expected rate of return [E(Ri)] for next year?

A) 4.25% B) 6.00% C) 6.25% D) 7.75% E) 8.00% A) 4.25% B) 6.00% C) 6.25% D) 7.75% E) 8.00%

Exhibit 1-3 USE THE FOLLOWING INFORMATION FOR THE NEXT PROBLEM(S) The common stock of XMen had the following historic prices. \[\begin{array} { l l } \text { Time } & \text { Price of XMen } \\ \hline 3 / 01 / 2004 & 50.00 \\ 3 / 01 / 2005 & 47.00 \\ 3 / 01 / 2006 & 76.00 \\ 3 / 01 / 2007 & 80.00 \\ 3 / 01 / 2008 & 85.00 \\ 3 / 01 / 2009 & 90.00 \end{array}\] -Refer to Exhibit 1-3. What was your annual holding period yield (Annual HPY)?

A) 0.1462 B) 0.1247 C) 1.8 D) 0.40 E) 0.25 A) 0.1462 B) 0.1247 C) 1.8 D) 0.40 E) 0.25

Exam 1: The Investment Setting

Exhibit 1-2 USE THE FOLLOWING INFORMATION FOR THE NEXT PROBLEM(S) Suppose you bought a GM corporate bond on January 25, 2009 for $750, on January 25, 2010 sold it for $650.00. -Refer to Exhibit 1-2. What was your annual holding period yield?

(Multiple Choice)

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Question 41

Exhibit 1-3 USE THE FOLLOWING INFORMATION FOR THE NEXT PROBLEM(S) The common stock of XMen had the following historic prices. Time Price of XMen 3/01/2004 50.00 3/01/2005 47.00 3/01/2006 76.00 3/01/2007 80.00 3/01/2008 85.00 3/01/2009 90.00 -Refer to Exhibit 1-3. What was your arithmetic mean annual yield for the investment in XMen?

(Multiple Choice)

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Question 42

The basic trade-off in the investment process is

(Multiple Choice)

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Question 43

A decrease in the expected real growth in the economy, all other things constant, will cause the security market line to

(Multiple Choice)

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Question 44

Exhibit 1-3 USE THE FOLLOWING INFORMATION FOR THE NEXT PROBLEM(S) The common stock of XMen had the following historic prices. Time Price of XMen 3/01/2004 50.00 3/01/2005 47.00 3/01/2006 76.00 3/01/2007 80.00 3/01/2008 85.00 3/01/2009 90.00 -Refer to Exhibit 1-3. What was your geometric mean annual yield for the investment in XMen?

(Multiple Choice)

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Question 45

The rate of exchange between certain future dollars and certain current dollars is known as the pure rate of interest.

(True/False)

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Question 46

Exhibit 1-5 USE THE FOLLOWING INFORMATION FOR THE NEXT PROBLEM(S) Assume that during the past year the consumer price index increased by 1.5% percent and the securities listed below returned the following nominal rates of return. Canadian T-bils 2.75\% Canadian corporate bonds 4.75\% -Refer to Exhibit 1-5. If over the past 20 years the annual returns on the S&P 500 market index averaged 12% with a standard deviation of 18%, what was the coefficient of variation?

(Multiple Choice)

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Question 47

The real risk-free rate is affected by two factors:

(Multiple Choice)

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Question 48

Exhibit 1-8 USE THE FOLLOWING INFORMATION FOR THE NEXT PROBLEM(S) Assume that you hold a two stock portfolio. You are provided with the following information on your holdings. Stock Shares Price (t) Price (t+1) 1 15 10 12 2 25 15 16 -Refer to Exhibit 1-8. Calculate the HPY for Stock 2

(Multiple Choice)

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Question 49

The holding period return (HPR) is equal to the holding period yield (HPY) stated as a percentage.

(True/False)

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Question 50

Exhibit 1-5 USE THE FOLLOWING INFORMATION FOR THE NEXT PROBLEM(S) Assume that during the past year the consumer price index increased by 1.5% percent and the securities listed below returned the following nominal rates of return. Canadian T-bils 2.75\% Canadian corporate bonds 4.75\% -Refer to Exhibit 1-5. If next year the real rates all rise by 10% while inflation climbs from 1.5% to 2.5%, what will be the nominal rate of return on each security?

(Multiple Choice)

4.7/5

(92)

Question 51

Exhibit 1-4 USE THE FOLLOWING INFORMATION FOR THE NEXT PROBLEM(S) You have concluded that next year the following relationships are possible: Economic Status Probability Rate of Return Weak Economy .15 -5\% Static Economy .60 5\% Strong Economy .25 15\% -Refer to Exhibit 1-4. What is your expected rate of return [E(Ri)] for next year?

(Multiple Choice)

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(79)

Question 52

Exhibit 1-2 USE THE FOLLOWING INFORMATION FOR THE NEXT PROBLEM(S) Suppose you bought a GM corporate bond on January 25, 2009 for $750, on January 25, 2010 sold it for $650.00. -Refer to Exhibit 1-2. What was your annual holding period return?

(Multiple Choice)

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Question 53

Exhibit 1-5 USE THE FOLLOWING INFORMATION FOR THE NEXT PROBLEM(S) Assume that during the past year the consumer price index increased by 1.5% percent and the securities listed below returned the following nominal rates of return. Canadian T-bils 2.75\% Canadian corporate bonds 4.75\% -Refer to Exhibit 1-5. What are the real rates of return for each of these securities?

(Multiple Choice)

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(77)

Question 54

Exhibit 1-7 USE THE FOLLOWING INFORMATION FOR THE NEXT PROBLEM(S) Consider the following information Nominal annual return on Canadian T-bills for year 2009 = 3.5% Nominal annual return on Canadian corporate bonds for year 2009= 4.75% Nominal annual return on Canadian large-cap stocks for year 2009 = 8.75% Consumer price index January 1, 2009 = 165 Consumer price index December 31, 2009 = 169 -Refer to Exhibit 1-7. Compute the rate of inflation for the year 2009

(Multiple Choice)

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Question 55

Two measures of the risk premium are the standard deviation and the variance.

(True/False)

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Question 56

Exhibit 1-6 USE THE FOLLOWING INFORMATION FOR THE NEXT PROBLEM(S) You are provided with the following information Nominal return on risk-free asset = 4.5% Expected return for asset i = 12.75% Expected return on the market portfolio = 9.25% -Refer to Exhibit 1-6. Calculate the risk premium for asset i

(Multiple Choice)

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(66)

Question 57

Exhibit 1-1 USE THE FOLLOWING INFORMATION FOR THE NEXT PROBLEM(S) Assume you bought 100 shares of NewTech common stock on January 15, 2009 at $50.00 per share and sold it on January 15, 2010 for $40.00 per share. -Refer to Exhibit 1-1. What was your holding period return?

(Multiple Choice)

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(90)

Question 58

Exhibit 1-3 USE THE FOLLOWING INFORMATION FOR THE NEXT PROBLEM(S) The common stock of XMen had the following historic prices. Time Price of XMen 3/01/2004 50.00 3/01/2005 47.00 3/01/2006 76.00 3/01/2007 80.00 3/01/2008 85.00 3/01/2009 90.00 -Refer to Exhibit 1-3. What was your annual holding period yield (Annual HPY)?

(Multiple Choice)

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Question 59

All of the following are major sources of uncertainty EXCEPT:

(Multiple Choice)

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Question 60

Showing 41 - 60 of 67

Exhibit 1-2 USE THE FOLLOWING INFORMATION FOR THE NEXT PROBLEM(S) Suppose you bought a GM corporate bond on January 25, 2009 for $750, on January 25, 2010 sold it for $650.00. -Refer to Exhibit 1-2. What was your annual holding period yield?

The basic trade-off in the investment process is

A decrease in the expected real growth in the economy, all other things constant, will cause the security market line to

The rate of exchange between certain future dollars and certain current dollars is known as the pure rate of interest.

The real risk-free rate is affected by two factors:

Exhibit 1-8 USE THE FOLLOWING INFORMATION FOR THE NEXT PROBLEM(S) Assume that you hold a two stock portfolio. You are provided with the following information on your holdings. Stock Shares Price (t) Price (t+1) 1 15 10 12 2 25 15 16 -Refer to Exhibit 1-8. Calculate the HPY for Stock 2

The holding period return (HPR) is equal to the holding period yield (HPY) stated as a percentage.

Exhibit 1-2 USE THE FOLLOWING INFORMATION FOR THE NEXT PROBLEM(S) Suppose you bought a GM corporate bond on January 25, 2009 for $750, on January 25, 2010 sold it for $650.00. -Refer to Exhibit 1-2. What was your annual holding period return?

Two measures of the risk premium are the standard deviation and the variance.

Exhibit 1-1 USE THE FOLLOWING INFORMATION FOR THE NEXT PROBLEM(S) Assume you bought 100 shares of NewTech common stock on January 15, 2009 at $50.00 per share and sold it on January 15, 2010 for $40.00 per share. -Refer to Exhibit 1-1. What was your holding period return?

All of the following are major sources of uncertainty EXCEPT:

The Asset Allocation Decision

Selecting Investments in a Global Market

Securities Markets and the Economy

Efficient Capital Markets

An Introduction to Portfolio Management

Asset Pricing Models: Capm and Apt

Economic and Industry Analysis

Company Analysis and Stock Valuation

Technical Analysis

Bond Fundamentals

The Analysis and Valuation of Bonds

An Introduction to Derivative Markets and Securities

Derivatives: Analysis and Valuation

Equity Portfolio Management Strategies

Bond Portfolio Management Strategies

Professional Money Management, Alternative Assets, and Industry Ethics

Evaluation of Portfolio Performance

Analysis of Financial Statements

An Introduction to Security Valuation

Web Appendix: A Review of Statistics and the Security Market Line

Web Appendix: A Review of Statistics and the Security Market Line

Appendix: Objectives and Constraints of Institutional Investors

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