1. Effective Annual Rate (EAR) is the annual interest rate that is quoted by the banks as an annual rate while the true annualized rate that one effectively recieves or pays is called Anual Percentag Rate (APR) (2 Points) True False 2. The constant Growth Model of stock valuation assumes that the stock will pay dividends that are expected to (2 points) Remain constant forever Decrease each year Grow at a constant rate forever 3. An absolute measure of return is flawed because it does not take into account the: (2 points) Economic Conditions in the Country Timing and Size of investment The Future Value 4. There is a probability of 30% that the demand for products of ABC company will be high resulting in its returns to be 60%. On the other hand the probability of its products' demand to be low is 70% resulting in a return of 20%, what is the overall expected return for ABC (2 points) 34% 32% 33% 5. A higher standard deviation of expected returns represents (2 Points) More Risk More Return 6. The Coefficient of Variation of returns of Invetment A is 2 while that of Stock B it is 4. which one is more riskier 2 Points) Stock A Stock B 7. Standard deviation of returns measures an investment's level of (2 Points) Risk Return 8. Expected return can be calculated out of a given probability distribution of probable returns as a (2 Points) Arithmatic Mean of returns Weighted Mean of returns Geometric Series of returns 9. The Dividend Discount Model finds the value of a stock by dicounting all the future expected dividends of the stock by a suitable discount rate 2 Points)