1. The risk-free rate is:

A) another term for the dividend yield.

B) defined as the increase in the value of a share of stock over time.

C) the rate of return earned on an investment in a firm that you personally own.

D) defined as the total of the capital gains yield plus the dividend yield.

E) the rate of return on a riskless investment.

2. What method is best used when of comparing the returns on various-sized investments?

A) total dollar return

B) real dollar return

C) absolute dollar return

D) percentage return

E) variance return

3. An investment has an expected return of 11% per year with a standard deviation of 24%. Assuming that the returns on this investment are at least roughly normally distributed, how frequently do you expect to earn between -13% and 35%?

A) 50

B) 68

C) 82

D) 90

E) 95

4. A stock sold for $75 at the beginning of the year. The end of year stock price was $79. What is the amount of the annual dividend if the total return for the year was 8.8 percent?

A) $1.23

B) $1.38

C) $2.60

D) $1.81

E) $2.31

5. Alex sold a stock and realized a 5.8 percent return for a 5-month holding period. What was his annualized rate of return?

A) 11.98 percent

B) 14.49 percent

C) 19.78 percent

D) 21.29 percent

E) 27.20 percent