1. Risk from investing in a security refers to:

a. volatility of security price

b. uncertainty about the future stock price

c. volatility of security returns

d. probability of loss from investing in the security

2. The expected value of annual returns of a portfolio is 10 percent with standard deviation of 20 percent. The compounded annual growth rate from investing in the portfolio is expected to be:

a. 10 percent

b. less than 10 percent

c. more than 10 percent

d. indeterminable

3. If I pay 30$ to play a game, 20$/pick. There are 2 boxes, one box has 60$ and one box has nothing. The probability of loss is

a. 0% b. 100% c. $10 d. 50%

4. The price of a stock is $20. The stock is not expected to pay any dividend for the foreseeable future. The probability of the price next year being more than $40 is

a. 0 percent

b. the same as the return being more than $20

c. the same as the return being more than 100 percent

d. indeterminable