Exam 12: Return, Risk and the Security Market

Over the past fifteen years, the common stock of The Flower Shoppe, Inc.has produced an arithmetic average return of 12.2 percent and a geometric average return of 11.5 percent.What is the projected return on this stock for the next five years according to Blume's formula?

Last year, you purchased a stock at a price of $47.10 a share.Over the course of the year, you received $2.40 per share in dividends while inflation averaged 3.4 percent.Today, you sold your shares for $49.50 a share.What is your approximate real rate of return on this investment?

A stock had returns of 11 percent, -18 percent, -21 percent, 20 percent, and 34 percent over the past five years.What is the standard deviation of these returns?

Which of the following statements is correct in relation to a stock investment? I.The capital gains yield can be positive, negative, or zero. II.The dividend yield can be positive, negative, or zero. III.The total return can be positive, negative, or zero. IV.Neither the dividend yield nor the total return can be negative.

According to Jeremy Siegel, the real return on stocks over the long-term has averaged about:

Which one of the following statements best defines the efficient market hypothesis?

Which one of the following categories of securities had the highest average return for the period 1926-2010?

You just sold 600 shares of Wesley, Inc.stock at a price of $32.04 a share.Last year, you paid $30.92 a share to buy this stock.Over the course of the year, you received dividends totaling $1.20 per share.What is your total capital gain on this investment?

A year ago, you purchased 300 shares of Stellar Wood Products, Inc.stock at a price of $8.62 per share.The stock pays an annual dividend of $0.10 per share.Today, you sold all of your shares for $4.80 per share.What is your total dollar return on this investment?

West Wind Tours stock is currently selling for $48 a share.The stock has a dividend yield of 3.2 percent.How much dividend income will you receive per year if you purchase 200 shares of this stock?

Which one of the following best defines the variance of an investment's annual returns over a number of years?

Suppose you bought a 10 percent coupon bond one year ago for $950.The face value of the bond is $1,000.The bond sells for $985 today.If the inflation rate last year was 9 percent, what was your total real rate of return on this investment?

The primary purpose of Blume's formula is to:

One year ago, you purchased a stock at a price of $47.50 a share.Today, you sold the stock and realized a total loss of 22.11 percent.Your capital gain was -$12.70 a share.What was your dividend yield?

A stock had annual returns of 3.6 percent, -8.7 percent, 5.6 percent, and 12.5 percent over the past four years.Which one of the following best describes the probability that this stock will produce a return of 22 percent or more in a single year?

Which one of the following statements is a correct reflection of the U.S.markets for the period 1926-2010?

Four months ago, you purchased 1,500 shares of Lakeside Bank stock for $11.20 a share.You have received dividend payments equal to $0.25 a share.Today, you sold all of your shares for $8.60 a share.What is your total dollar return on this investment?