1. [Holding Period Return] An art collector buys a painting at an initial cost of $200,000. A year later she sells the painting for $215,400. What rate of return does she achieve? Rate of return = (selling price / initial cust)^^ Years -1 (215,400/200,000)^ |-| Rate of return = 7.70% 2. Two years ago you bought a share of J-mart stock for $40. Over the first year, the price of J-mar to $60. Over the second year, the price of J-mart fell to $30, which is its current price. If you se stock today, what is your holding period return for the two years that you owned J-mart stock? a. b. 75% 0% C. -25% d. -50% 3. Arbitrage describes which one of the following: a Making profits without taking on any risk b. Selling securities that you do not own c. Refinancing debt when interest rates decline d. A trading halt on the floor of the exchange 4. Based on the historical data from 1926 to 2015 in the U.S., Fill in the blanks. Large-company stocks Small-company stocks Long-term corporate bonds Long-t