Question
1.Today, you sold 200 shares of Indian River Produce stock. Your total return on these shares is 6.2%. You purchased the shares one year ago
1.Today, you sold 200 shares of Indian River Produce stock. Your total return on these shares is 6.2%. You purchased the shares one year ago at a price of $31.10 a share. You have received a total of $100 in dividends over the course of the year. What is your capital gains yield on this investment?
a. | 5.67% | |
b. | 4.59% | |
c. | 7.41% | |
d. | 7.26% | |
e. | 3.68% |
2. A stock has annual returns of 13 percent, 21 percent, -12 percent, 7 percent, and -6 percent for the past five years. The arithmetic average of these returns is _____ percent while the geometric average return for the period is _____ percent.
a. | 4.60; 3.89 | |
b. | 3.89; 3.62 | |
c. | 4.60; 3.62 | |
d. | 3.89; 4.60 | |
e. | 3.62; 3.89 |
3. An increase in the unsystematic risk of a portfolio will _____ the portfolio's beta.
a. | either increase or not change | |
b. | decrease | |
c. | either decrease or not change | |
d. | not change | |
e. | increase |
4. The standard deviation of a portfolio:
a. | considers the current value of the investments within that portfolio. | |
b. | measures only the unsystematic risk of that portfolio. | |
c. | measures only the systematic risk of that portfolio. | |
d. | is equal to the weighted arithmetic average of the standard deviations of the individual securities included in the portfolio. | |
e. | is based on a geometric average of the standard deviations of the individual securities included in the portfolio.
|
5.Which one of the following is considered an example of systematic risk?
a. | lower company sales than predicted | |
b. | an increase in overseas sales for a conglomerate, such as General Electric | |
c. | resignation of a firm's chief financial officer | |
d. | higher company profits than those forecasted | |
e. | a higher inflation rate than predicted |
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