Exam 10: Risk and Return: Lessons From Market History

What are the arithmetic and geometric average returns for a stock with annual returns of 5%,8%,-3%,and 16%? A.6.5%;6.28% B.6.5%;9.21% C.9.3%;6.28% D.9.3%;9.21% E.10.25%;8.31%

What are the arithmetic and geometric average returns for a stock with annual returns of 21%,8%,-32%,41%,and 5%?

You purchased 200 shares of stock at a price of $36.72 per share.Over the last year,you have received total dividend income of $322.What is the dividend yield?

Over the period of 1926 to 2012,the average rate of inflation was _____%.

Suppose you own a risky asset with an expected return of 12% and a standard deviation of 20%.If the returns are normally distributed,the approximate probability of receiving a return greater than 32% is approximately:

A stock had returns of 8%,39%,11%,and -24% for the past four years.Which one of the following best describes the probability that this stock will NOT lose more than 43% in any one given year?

Over the period of 1926 through 2012,the annual rate of return on _____ has been more volatile than the annual rate of return on _____.

A capital gain occurs when:

If the expected return on the market is 16%,then using the historical risk premium on large stocks of 8.6%,the current risk-free rate is:

The standard deviation for a set of stock returns can be calculated as the:

Today,you sold 200 shares of SLG,Inc.stock.Your total return on these shares is 12.5%.You purchased the shares one year ago at a price of $28.50 a share.You have received a total of $280 in dividends over the course of the year.What is your capital gains yield on this investment?

The excess return you earn by moving from a relatively risk-free investment to a risky investment is called the:

Six months ago,you purchased 100 shares of stock in ABC Co.at a price of $43.89 a share.ABC stock pays a quarterly dividend of $.10 a share.Today,you sold all of your shares for $45.13 per share.What is the total amount of your capital gains on this investment?

Six months ago,you purchased 100 shares of stock in ABC Co.at a price of $43.26 a share.ABC stock pays a quarterly dividend of $.10 a share.Today,you sold all of your shares for $46.71 per share.What is the total amount of your capital gains on this investment?

A stock had returns of 6%,13%,-11%,and 17% over the past four years.What is the geometric average return for this time period?

The returns on your portfolio over the last 5 years were -5%,20%,0%,10% and 5%.What is the standard deviation of your return?

The prices for IMB over the last 3 years are given below.Assuming no dividends were paid,what was the 3-year holding period return? Given the following information: Year 1 return = 10%,Year 2 return = 15%,Year 3 return = 12%.

The long term inflation rate average was 3.2% and you invested in long term corporate bonds over the same period which earned 6.1%.What was the average risk premium you earned?

On average,for the period 1926 through 2012:

The risk premium is computed by ______ the average return for the investment.