Exam 5: Risk, Return, and the Historical Record

A year ago, you invested $1,000 in a savings account that pays an annual interest rate of 6%. What is your approximate annual real rate of return if the rate of inflation was 2% over the year?

The best measure of a portfolio's risk adjusted performance is the _________.

The holding-period return (HPR) on a share of stock is equal to

When comparing investments with different horizons, the ____________ provides the more accurate comparison.

The holding-period return (HPR) for a stock is equal to

Which of the following factors would not be expected to affect the nominal interest rate?

In a two tailed normal distribution function, what is the confidence level created at 2 standard deviations?

You purchased a share of CSCO stock for $20. One year later, you received $2 as a dividend and sold the share for $31. What was your holding-period return?

A(n) ____________________ can be used to show the possible outcomes from a normal distribution function.

You have been given this probability distribution for the holding-period return for KMP stock: Stock of the Economy Probability HPR Boom 0.30 18\% Normal growth 0.50 12\% Recession 0.20 -5\% What is the expected variance for KMP stock?

A year ago, you invested $1,000 in a savings account that pays an annual interest rate of 4.3%. What is your approximate annual real rate of return if the rate of inflation was 3% over the year?

Other things equal, an increase in the government budget deficit

You purchased a share of stock for $65. One year later, you received $2.37 as a dividend and sold the share for $63. What was your holding-period return?

If a portfolio had a return of 15%, the risk-free asset return was 5%, and the standard deviation of the portfolio's excess returns was 30%, the Sharpe measure would be

_______ is a risk measure that indicates vulnerability to extreme negative returns.

You have been given this probability distribution for the holding-period return for a stock: Stock of the Economy Probability HPR Boom 0.40 22\% Normal growth 0.35 11\% Recession 025 -9\% What is the expected holding-period return for the stock?

You purchase a share of Duke Energy Stock for $90. One year later, after receiving a dividend of $3, you sell the stock for $92. What was your holding-period return?

If a portfolio had a return of 11%, the risk-free asset return was 6%, and the standard deviation of the portfolio's excess returns was 25%, the risk premium would be

You have been given this probability distribution for the holding-period return for a stock: Stock of the Economy Probability HPR Boom 0.40 22\% Normal growth 0.35 11\% Recession 0.25 -9\% What is the expected variance for the stock?

You purchased a share of stock for $68. One year later, you received $5.00 as a dividend and sold the share for $74.50. What was your holding-period return?