Exam 10: Risk and Return: Lessons From Market History

During the 2008 financial crisis,the Icelandic stock exchange temporarily halted trading.What was the reaction of that market when trading resumed a few days later?

Over the past 3 years,a stock had annual returns of 6.4 percent,11.9 percent,and 14.8 percent.What is the mean return?

GLM stock provided annual returns of 9.9 percent,8.2 percent,−6.7 percent,4.5 percent,and 7.1 percent over the last 5 years.What is the geometric average rate of return?

Which one of these statements is correct?

Assume a 20-year period produced small-company returns of 16.7 percent with a risk premium of 9.8 percent,inflation of 5.4 percent,and long-term government bond returns of 10.1 percent.What was the risk-free rate of return during this period?

A stock returned 11 percent,16 percent,−7 percent,and −13 percent annually for the past 4 years.Based on this information,what is the 99.74 percent probability range for any one given year?

A stock has an expected rate of return of 13.9 percent and a standard deviation of 23.3 percent.Which one of the following best describes the probability that this stock will lose more than 1/3 of its value in any one year?

Assume stocks A and B have had identical stock prices every day for the past 3 years.Stock A pays a dividend but Stock B does not.Which one of these statements applies to these stocks for the last 3 years?

The histogram of the returns on large-company stocks for the period 1926 to 2015 shows that the largest number of years had annual returns of

The average squared difference between the actual return and the average return is called the

Eight months ago,Isaac purchased 500 shares of stock at a price of $36.20 a share.To date,he has received two quarterly dividends of $.46 a share each.If he sells his shares at the current price of $36.44 a share,what will be his holding period percentage return?

Given a normal distribution,assume you want to earn a rate of return that plots more than three standard deviations above the mean.What is your probability of earning such a return in any one year?

EXO shares are currently selling for $22.08 each.You bought 300 shares one year ago at $18.60 a share and received dividend payments of $0.62 a share.What is the percentage capital gain for the period?

The risk premium is computed by ________ the average rate of return for an investment.

During the period 2000 to 2015,which one of the following years had the lowest rate of return for the S&P 500 Index?

One year ago,Aimee purchased 300 shares of stock at a price of $21.39 per share.Over the last year,she received total dividend income of $69.What is the dividend yield?

For the period 1926 to 2015,large-company stocks had a standard deviation of

Over the long-term,which one of the following is a correct statement concerning risk premium?

Which one of the following values cannot be negative?

Winslow stock is currently selling for $39 a share.The stock has a dividend yield of 2.3 percent.How much dividend income will you receive per year if you purchase 400 shares of this stock?