Exam 9: Characterizing Risk and Return

Investment Return MedTech Corp.stock was $50.95 per share at the end of last year.Since then,it paid a $0.45 per share dividend.The stock price is currently $62.50.If you owned 500 shares of MedTech,what was your percent return?

Which of the following is incorrect?

Which of the following is correct?

If you own 400 shares of Xerox at $15.00,500 shares of Qwest at $10.00,and 350 shares of Liz Claiborne at $45.00,what are the portfolio weights of each stock?

Which of the following statements is correct?

Portfolio Weights An investor owns $10,000 of Adobe Systems stock,$15,000 of Dow Chemical,and $25,000 of Office Depot.What are the portfolio weights of each stock?

Portfolio Weights An investor owns $2,000 of Adobe Systems stock,$4,000 of Dow Chemical,and $6,000 of Office Depot.What are the portfolio weights of each stock?

Compute the standard deviation of Kohl's monthly returns.The past five monthly returns for Kohl's are 5.55 percent,8.62 percent,-4.44 percent,-1.52 percent,and 9.75 percent.

Define diversifiable risk and contrast it with market risk.

Rank the following three stocks by their risk-return relationship,best to worst.Night Ryder has an average return of 33 percent and standard deviation of 40 percent.The average return and standard deviation of WholeMart are 10 percent and 20 percent; and of Fruit Fly are 19 percent and 33 percent.

Explain how to compute a portfolio's return.

To find the percentage return of an investment:

Dominant Portfolios Determine which one of these three portfolios dominates another.Name the dominated portfolio and the portfolio that dominates it.Portfolio Blue has an expected return of 13 percent and risk of 17 percent.The expected return and risk of portfolio Yellow are 15 percent and 19 percent,and for the Purple portfolio are 12 percent and 18 percent.

Sprint Nextel Corp.stock ended the previous year at $25.00 per share.It paid a $2.57 per share dividend last year.It ended last year at $18.89.If you owned 650 shares of Sprint,what was your dollar return and percent return?

Investment Return WayCo stock was $75 per share at the end of last year.Since then,it paid a $3 per share dividend last year.The stock price is currently $70.If you owned 200 shares of WayCo,what was your percent return?

Which of the following is another term for market risk?

Which of the following is defined as the portion of total risk that is attributable to firm or industry factors and can be reduced through diversification?

Which of the following is the concept and procedure for combining securities into a portfolio to minimize risk?

Risk versus Return in Bonds Assess the risk-return relationship of the following bonds:

Risk,Return,and Their Relationship Consider the following annual average return,standard deviation,and coefficient of variation for Companies E and L.Which stock appears better? Why?