Exam 12: Return, Risk and the Security Market

The common stock of Air United, Inc., had annual returns of 15.6 percent, 2.4 percent, -11.8 percent, and 32.9 percent over the last four years, respectively.What is the standard deviation of these returns?

(Multiple Choice)

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Question 21

According to theory, studying historical stock price movements to identify mispriced stocks:

(Multiple Choice)

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Question 22

Today, you sold 200 shares of Indian River Produce stock.Your total return on these shares is 6.2 percent.You purchased the shares one year ago at a price of $31.10 a share.You have received a total of $100 in dividends over the course of the year.What is your capital gains yield on this investment?

(Multiple Choice)

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Question 23

Standard deviation is a measure of which one of the following?

(Multiple Choice)

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Question 24

Which of the following statements related to market efficiency tend to be supported by current evidence? I.Markets tend to respond quickly to new information. II.It is difficult for investors to earn abnormal returns. III.Short-run prices are difficult to predict accurately based on public information. IV.Markets are most likely weak form efficient.

(Multiple Choice)

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Question 25

Which one of the following statements is correct based on the historical record for the period 1926-2010?

(Multiple Choice)

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Question 26

The average annual return on small-company stocks was about _____ percent greater than the average annual return on large-company stocks over the period 1926-2010.

(Multiple Choice)

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Question 27

One year ago, you purchased a stock at a price of $33.49.The stock pays quarterly dividends of $0.20 per share.Today, the stock is selling for $28.20 per share.What is your capital gain on this investment?

(Multiple Choice)

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Question 28

Stacy purchased a stock last year and sold it today for $3 a share more than her purchase price.She received a total of $0.75 in dividends.Which one of the following statements is correct in relation to this investment?

(Multiple Choice)

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Question 29

The historical record for the period 1926-2010 supports which one of the following statements?

(Multiple Choice)

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Question 30

Estimates of the rate of return on a security based on a historical arithmetic average will probably tend to _ the expected return for the long-term and estimates using the historical geometric average will probably tend to _ the expected return for the short-term.

(Multiple Choice)

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Question 31

One year ago, you purchased 500 shares of Best Wings, Inc.stock at a price of $9.75 a share.The company pays an annual dividend of $0.10 per share.Today, you sold all of your shares for $15.60 a share.What is your total percentage return on this investment?

(Multiple Choice)

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Question 32

A stock has annual returns of 6 percent, 14 percent, -3 percent, and 2 percent for the past four years.The arithmetic average of these returns is _ percent while the geometric average return for the period is _ percent.

(Multiple Choice)

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Question 33

A stock has an expected rate of return of 13 percent and a standard deviation of 21 percent.Which one of the following best describes the probability that this stock will lose at least half of its value in any one given year?

(Multiple Choice)

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Question 34

Which one of the following was the least volatile over the period of 1926-2010?

(Multiple Choice)

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Question 35

Assume that the returns from an asset are normally distributed.The average annual return for the asset is 18.1 percent and the standard deviation of the returns is 32.5 percent.What is the approximate probability that your money will triple in value in a single year?

(Multiple Choice)

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Question 36

Which one of the following categories of securities had the lowest average risk premium for the period 1926-2010?

(Multiple Choice)

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Question 37

A stock has returns of 18 percent, 15 percent, -21 percent, and 6 percent for the past four years.Based on this information, what is the 95 percent probability range of returns for any one given year?

(Multiple Choice)

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Question 38

Efficient financial markets fluctuate continuously because:

(Multiple Choice)

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Question 39

Which one of the following statements related to capital gains is correct?

(Multiple Choice)

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Question 40

Showing 21 - 40 of 97

The common stock of Air United, Inc., had annual returns of 15.6 percent, 2.4 percent, -11.8 percent, and 32.9 percent over the last four years, respectively.What is the standard deviation of these returns?

According to theory, studying historical stock price movements to identify mispriced stocks:

Today, you sold 200 shares of Indian River Produce stock.Your total return on these shares is 6.2 percent.You purchased the shares one year ago at a price of $31.10 a share.You have received a total of $100 in dividends over the course of the year.What is your capital gains yield on this investment?

Standard deviation is a measure of which one of the following?

Which one of the following statements is correct based on the historical record for the period 1926-2010?

The average annual return on small-company stocks was about _____ percent greater than the average annual return on large-company stocks over the period 1926-2010.

One year ago, you purchased a stock at a price of $33.49.The stock pays quarterly dividends of $0.20 per share.Today, the stock is selling for $28.20 per share.What is your capital gain on this investment?

Stacy purchased a stock last year and sold it today for $3 a share more than her purchase price.She received a total of $0.75 in dividends.Which one of the following statements is correct in relation to this investment?

The historical record for the period 1926-2010 supports which one of the following statements?

Estimates of the rate of return on a security based on a historical arithmetic average will probably tend to _ the expected return for the long-term and estimates using the historical geometric average will probably tend to _ the expected return for the short-term.

One year ago, you purchased 500 shares of Best Wings, Inc.stock at a price of $9.75 a share.The company pays an annual dividend of $0.10 per share.Today, you sold all of your shares for $15.60 a share.What is your total percentage return on this investment?

A stock has annual returns of 6 percent, 14 percent, -3 percent, and 2 percent for the past four years.The arithmetic average of these returns is _ percent while the geometric average return for the period is _ percent.

A stock has an expected rate of return of 13 percent and a standard deviation of 21 percent.Which one of the following best describes the probability that this stock will lose at least half of its value in any one given year?

Which one of the following was the least volatile over the period of 1926-2010?

Assume that the returns from an asset are normally distributed.The average annual return for the asset is 18.1 percent and the standard deviation of the returns is 32.5 percent.What is the approximate probability that your money will triple in value in a single year?

Which one of the following categories of securities had the lowest average risk premium for the period 1926-2010?

A stock has returns of 18 percent, 15 percent, -21 percent, and 6 percent for the past four years.Based on this information, what is the 95 percent probability range of returns for any one given year?

Efficient financial markets fluctuate continuously because:

Which one of the following statements related to capital gains is correct?

Introduction to Corporate Finance

Corporate Governance

Financial Statement Analysis

Introduction to Valuation: the Time Value of Money

Discounted Cash Flow Valuation

Bond Valuation

Equity Valuation

Net Present Value and Other Investment Criteria

Making Capital Investment Decisions

Project Analysis and Evaluation

Some Lessons From Recent Capital Market History

Cost of Capital

Raising Capital

Financial Leverage and Capital Structure Policy

Dividends and Payout Policy

Short-Term Financial Planning and Management

International Corporate Finance

Behavioural Finance

Financial Risk Management

Options and Corporate Finance

Filters

Exam 12: Return, Risk and the Security Market

The common stock of Air United, Inc., had annual returns of 15.6 percent, 2.4 percent, -11.8 percent, and 32.9 percent over the last four years, respectively.What is the standard deviation of these returns?

According to theory, studying historical stock price movements to identify mispriced stocks:

Standard deviation is a measure of which one of the following?

Which one of the following statements is correct based on the historical record for the period 1926-2010?

The average annual return on small-company stocks was about _____ percent greater than the average annual return on large-company stocks over the period 1926-2010.

One year ago, you purchased a stock at a price of $33.49.The stock pays quarterly dividends of $0.20 per share.Today, the stock is selling for $28.20 per share.What is your capital gain on this investment?

Stacy purchased a stock last year and sold it today for $3 a share more than her purchase price.She received a total of $0.75 in dividends.Which one of the following statements is correct in relation to this investment?

The historical record for the period 1926-2010 supports which one of the following statements?

Estimates of the rate of return on a security based on a historical arithmetic average will probably tend to _____ the expected return for the long-term and estimates using the historical geometric average will probably tend to _____ the expected return for the short-term.

One year ago, you purchased 500 shares of Best Wings, Inc.stock at a price of $9.75 a share.The company pays an annual dividend of $0.10 per share.Today, you sold all of your shares for $15.60 a share.What is your total percentage return on this investment?

A stock has annual returns of 6 percent, 14 percent, -3 percent, and 2 percent for the past four years.The arithmetic average of these returns is _____ percent while the geometric average return for the period is _____ percent.

A stock has an expected rate of return of 13 percent and a standard deviation of 21 percent.Which one of the following best describes the probability that this stock will lose at least half of its value in any one given year?

Which one of the following was the least volatile over the period of 1926-2010?

Assume that the returns from an asset are normally distributed.The average annual return for the asset is 18.1 percent and the standard deviation of the returns is 32.5 percent.What is the approximate probability that your money will triple in value in a single year?

Which one of the following categories of securities had the lowest average risk premium for the period 1926-2010?

A stock has returns of 18 percent, 15 percent, -21 percent, and 6 percent for the past four years.Based on this information, what is the 95 percent probability range of returns for any one given year?

Efficient financial markets fluctuate continuously because:

Which one of the following statements related to capital gains is correct?

Introduction to Corporate Finance

Corporate Governance

Financial Statement Analysis

Introduction to Valuation: the Time Value of Money

Discounted Cash Flow Valuation

Bond Valuation

Equity Valuation

Net Present Value and Other Investment Criteria

Making Capital Investment Decisions

Project Analysis and Evaluation

Some Lessons From Recent Capital Market History

Cost of Capital

Raising Capital

Financial Leverage and Capital Structure Policy

Dividends and Payout Policy

Short-Term Financial Planning and Management

International Corporate Finance

Behavioural Finance

Financial Risk Management

Options and Corporate Finance

Filters

Estimates of the rate of return on a security based on a historical arithmetic average will probably tend to _ the expected return for the long-term and estimates using the historical geometric average will probably tend to _ the expected return for the short-term.

A stock has annual returns of 6 percent, 14 percent, -3 percent, and 2 percent for the past four years.The arithmetic average of these returns is _ percent while the geometric average return for the period is _ percent.