Exam 2: Understanding Risk and Return

Another name for the effective annual rate is the

Jones bought stock for $5000, sold it for $6500, and received $235 in dividends. His income yield was

A data series has a variance of 64%. The standard deviation is

Tom purchased 100 shares of EDS at $34 and sold it for $41 two years later. If EDS paid a $.15/share dividend over the eight quarters of investment, what was the annualized annual rate of return that Tom earned on the investment?

The public's changing values associated with nutrition is a social risk for McDonalds Corporation.

Jones bought stock for $5000, sold it for $6500, and received no dividends. His holding period return is

It is especially important to annualize returns from holding periods of less than three months.

A bank pays 6% interest per year, compounded quarterly. What is the effective annual rate?

The price of a bond equals the present value of the coupon annuity.

A bank pays 6% interest per year, compounded quarterly. How much will $100 grow to after two years?

There is a(n) _____ relationship between risk and expected return.