Question 1

Return and risk are inversely related.

Accepted Answer

A) True 
 B)False

Question 2

Assume you are a U. S. citizen who purchases $20,000 worth of bonds of the Deep Shaft Mining Company in Kenya. What sources of risk can you identify with this investment?

Accepted Answer

Business risk, count

Question 3

The returns and risk measures in this chapter are calculated from historical data. Are such measures good predictors of the future? What are some circumstances that could change to impact future return and risk? How can an investor use these return and risk measures to help construct a portfolio?

Accepted Answer

Historical risk and returns are a starti

Question 4

Which of the following is true regarding the cumulative wealth index? It:

Accepted Answer

A)  is measured by adding up the total returns over the holding period and dividing by the investment. 
B)  uses a beginning index value (often set to $1, but it can be set to any amount). 
C)  is the present value of the future cash flows expected from the investment. 
D)  uses the arithmetic mean as the rate of growth of one's wealth. 
A)  is measured by adding up the total returns over the holding period and dividing by the investment. 
B)  uses a beginning index value (often set to $1, but it can be set to any amount). 
C)  is the present value of the future cash flows expected from the investment. 
D)  uses the arithmetic mean as the rate of growth of one's wealth.

Question 5

What does the empirical evidence indicate about the investment performance of small stocks with strong growth opportunities that pay no dividends? Why might such stocks be characterized as lottery tickets?

Accepted Answer

Of the prominent alternative investment

Question 6

Korea's consumer price index is expected to increase from its current level of 797 to 859 by next year. The current rate on one-year Korean government bonds is 9.5%. What is the expected real risk-free rate for Korea?

Accepted Answer

First find the expected inflat

Question 7

What is the major drawback of a return measure? Why is it the most common return calculation used by investors?

Accepted Answer

The return measure does not consider the

Question 8

Another name for a capital gain is yield.

Accepted Answer

A) True 
 B)False

Return and risk are inversely related.

Assume you are a U. S. citizen who purchases $20,000 worth of bonds of the Deep Shaft Mining Company in Kenya. What sources of risk can you identify with this investment?

The returns and risk measures in this chapter are calculated from historical data. Are such measures good predictors of the future? What are some circumstances that could change to impact future return and risk? How can an investor use these return and risk measures to help construct a portfolio?

Which of the following is true regarding the cumulative wealth index? It:

What does the empirical evidence indicate about the investment performance of small stocks with strong growth opportunities that pay no dividends? Why might such stocks be characterized as lottery tickets?

Korea's consumer price index is expected to increase from its current level of 797 to 859 by next year. The current rate on one-year Korean government bonds is 9.5%. What is the expected real risk-free rate for Korea?

What is the major drawback of a return measure? Why is it the most common return calculation used by investors?

Another name for a capital gain is yield.

Understanding Investments

Investment Alternatives

Indirect Investing

Securities Markets and Market Indexes

How Securities Are Traded

Portfolio Theory

Portfolio Selection and Asset Allocation

Capital Market Theory and Asset Pricing Models

Common Stock Valuation

Common Stocks: Analysis and Strategy

Market Efficiency

Economymarket Analysis

Sectorindustry Analysis

Company Analysis

Technical Analysis

Bond Yields and Prices

Bonds: Analysis and Strategy

Options

Futures Contracts

Managing Your Financial Assets

Evaluation of Investment Performance

Filters

Exam 6: The Risk and Return From Investing

Return and risk are inversely related.

Assume you are a U. S. citizen who purchases $20,000 worth of bonds of the Deep Shaft Mining Company in Kenya. What sources of risk can you identify with this investment?

The returns and risk measures in this chapter are calculated from historical data. Are such measures good predictors of the future? What are some circumstances that could change to impact future return and risk? How can an investor use these return and risk measures to help construct a portfolio?

Which of the following is true regarding the cumulative wealth index? It:

What does the empirical evidence indicate about the investment performance of small stocks with strong growth opportunities that pay no dividends? Why might such stocks be characterized as lottery tickets?

Korea's consumer price index is expected to increase from its current level of 797 to 859 by next year. The current rate on one-year Korean government bonds is 9.5%. What is the expected real risk-free rate for Korea?

What is the major drawback of a return measure? Why is it the most common return calculation used by investors?

Another name for a capital gain is yield.

Understanding Investments

Investment Alternatives

Indirect Investing

Securities Markets and Market Indexes

How Securities Are Traded

Portfolio Theory

Portfolio Selection and Asset Allocation

Capital Market Theory and Asset Pricing Models

Common Stock Valuation

Common Stocks: Analysis and Strategy

Market Efficiency

Economymarket Analysis

Sectorindustry Analysis

Company Analysis

Technical Analysis

Bond Yields and Prices

Bonds: Analysis and Strategy

Options

Futures Contracts

Managing Your Financial Assets

Evaluation of Investment Performance

Filters