Exam 12: Financial Return and Risk Concepts

Rico bought 100 shares of Banana Republic stock for $24.00 per share on January 1, 2010.He received a dividend of $2.00 per share at the end of 2010 and $3.00 per share at the end of 2011.At the end of 2012, Rico collected a dividend of $4.00 per share and sold his stock for $18.00 per share.What was Rico's realized holding period return?

After controlling for risk, iIf someone were able to earn greater than the average returns for the market on a consistent basis using publicly available information, which form of market efficiency is violated?

During the past 75 years, small company stocks have provided investors with higher average annual returns than large company stocks. Not in the chapter.

The slope of the linear relation between the returns on a stock and the returns on the market portfolio is called the:

Which of the following statements is most correct?

Variations in a firm’s tax rate and tax-related charges over time due to changing tax laws and regulations is called:

In an efficient market which of the following would not be expected to cause a quick price change in the stock of a company?

Which of the following statements is most correct?

Assume the probability of a pessimistic, most likely and optimistic state of nature is .25, .45 and .30, and the returns associated with those states of nature are 10%, 12%, and 16% for asset X.Based on this information, the expected return and standard deviation of return are: Same as 73 with "none of the above" answer

In an efficient market:

During the past 75 years, corporate bonds have provided investors with higher average annual returns than stocks.

According to the definitions given in the text, if Stock A has a standard deviation of 4% and expected returns of 9%, and Stock B has a standard deviation of 3% and returns of 1%, which stock is riskier?

Rico bought 100 shares of Banana Republic stock for $24.00 per share on January 1, 2010.He received a dividend of $2.00 per share at the end of 2010 and $3.00 per share at the end of 2011.At the end of 2012, Rico collected a dividend of $4.00 per share and sold his stock for $18.00 per share.What was Rico's realized holding period return?

Variations in operating income over time because of variations in unit sales, price, cost margins, and/or fixed expenses are called:

Which of the following statements is most correct?

Which one of the following assets has historically had the highest average annual return?

Which of the following statements is most correct?

Unsystematic risk is the risk that cannot be eliminated through diversification.

Investing in ____________ is a way for small investors to enjoy the benefits of professional management and diversification.

A higher coefficient of variation indicates more risk per unit of return.