Exam 1: A Brief History of Risk and Return

Bill has been adding funds to his investment account each year for the past 3 years.He started with an initial investment of $1,000.After earning a 10 percent return the first year,he added $3,000 to his portfolio.In this year his investments lost 5 percent.Undeterred,Bill added $2,000 the next year and earned a 2 percent return.Last year,discouraged by the recent results,he only added $500 to his portfolio,but in this final year his investments earned 8 percent.What was Bill's dollar-weighted average return for his investments?

You purchased a stock for $50.00 a share and resold it one year later.Your total return for the year was 11.5 percent and the dividend yield was 2.8 percent.At what price did you resell the stock?

Christine owns a stock that dropped in price from $43.80 to 39.49 over the past year.The dividend yield on that stock is 1.8 percent.What is her total return on this investment for the year?

You own a stock that has produced an arithmetic average return of 8.6 percent over the past five years.The annual returns for the first four years were 16,11,-19,and 3 percent,respectively.What was the rate of return on the stock in year five?

If you multiply the number of shares outstanding for a stock by the price per share,you are computing the firm's:

Which one of the following had the smallest standard deviation of returns for the period 1926-2015?

An initial investment of $41,800 fifty years ago is worth $1,533,913 today.What is the geometric average return on this investment?

When we refer to the rate of return on an investment,we are generally referring to the:

The standard deviation is a measure of:

Over the past four years,the common stock of Jess Electronics Co.produced annual returns of 7.2,5.8,11.2,and 13.6 percent,respectively.Treasury bills produced returns of 3.4,3.3,4.1,and 4.0 percent,respectively over the same period.What is the standard deviation of the risk premium on Jess Electronics Co.stock for this time period?

Stacey purchased 300 shares of Coulter Industries stock and held it for 4 months before reselling it.What is the value of "m" when computing the annualized return on this investment?

The average risk premium on long-term corporate bonds for the period 1926-2015 was:

For the period 1926-2015,long-term government bonds had an average return that ________ the average return on long-term corporate bonds while having a standard deviation that ________ the standard deviation of the long-term corporate bonds.

A frequency distribution,which is completely defined by its average (mean)and variance or standard deviation,is referred to as a(n):

A stock sold for $25 at the beginning of the year.The end of year stock price was $25.70.What is the amount of the annual dividend if the total return for the year was 7.7 percent?

The rate of return earned on a U.S.Treasury bill is frequently used as a proxy for the:

You have owned a stock for seven years.The geometric average return on this investment for those seven years is positive even though the annual rates of return have varied significantly.Given this,you know the arithmetic average return for the period is:

An asset had annual returns of 17,-35,-18,24,and 6 percent,respectively,over the past five years.What is the arithmetic average return?

An asset had annual returns of 13,10,-14,3,and 36 percent,respectively,for the past five years.What is the standard deviation of these returns?

The risk premium is defined as the rate of return on: