14:59 1. You have calculated the historical dollar- weighted return, annual geometric average return, and annual arithmetic average return. If you desire to forecast performance for next year, the best forecast will be given by the A) Dollar-weighted return B) Geometric average return C) Arithmetic average return D) Index return E) None of the above 2. You have calculated the historical dollar- weighted return, annual geometric average return, and annual arithmetic average return. You always reinvest your dividends and interest earned on the portfolio. Which method provides the best measure of the actual average historical performance of the investments you have chosen? A) Dollar-weighted return B) Geometric average return C) Arithmetic average return D) Mean holding period return OE) None of the above 14:59 ** 3. Your timing was good last year. You invested more in your portfolio right before prices went up, and you sold right before prices went down. In calculating historical performance measures, which one of the following will be the largest?* A) Dollar-weighted return B) Geometric average return C) Arithmetic average return D) None of the above 4. The market risk premium is defined as A) The difference between the return on an index fund and the return on Treasury bills B) The difference between the return on a small-firm mutual fund and the return on the Standard & Poor's 500 Index C) The difference between the return on the risky asset with the lowest returns and the return on Treasury bills D) The difference between the return on the highest-yielding asset and the return on the lowest-yielding asset T 15:00 a docs.google.com 5. The reward-to-volatility ratio (Sharpe Ratio) is given by A) The slope of the capital allocation line B) The second derivative of the capital allocation line C) The point at which the second derivative of the investor's indifference curve reaches zero D) The portfolio's excess return E) None of the above 6. Annual percentage rates can be converted to effective annual rates by means of the following formula: A) [1 + (APR)]^(n-1) B) (APR)(n) C) (APR) D) (periodic rate)n)