1. A stock has an expected rate of return of 8.3 percent and a standard deviation of 6.4 percent. Which one of the following best describes the probability that this stock will lose more than 4.50 percent in any one given year?

Multiple Choice

• Less than .5 percent

• Less than 1.5 percent

• Less than 2.5 percent

• Less than 1.0 percent

• Less than 5 percent

2. Assume that over the last several decades, the total annual returns on large-company common stocks averaged 12.1 percent, small-company stocks averaged 16.5 percent, long-term government bonds averaged 6 percent, and U.S. T-bills averaged 3.4 percent. What was the average excess return earned by long-term government bonds, and small-company stocks respectively?

Multiple Choice

• 4.4 percent; 2.6 percent

• 1.9 percent; 5.1 percent

• 1.8 percent; 13.3 percent

• 2.6 percent; 4.4 percent

• 2.6 percent; 13.1 percent

3. Over the period of 1926 to 2017, the average rate of inflation was _____ percent.

Multiple Choice

• 3.0

• 2.7

• 3.8

• 2.0

• 4.3

4. From November 2007 through January 2009, the S&P 500 Index lost approximately what percent of its value?

Multiple Choice

• 37

• 33

• 45

• 51

• 43