5. If the annual real rate of interest is 2.5% and the expected inflation rate is 3.4%, the nominal rate of interest would be approximately: a. b. c. d. e. 4.9% 0.9% -0.9% None of the above. You purchased a share of Cisco stock for $20.00. One year later, you received a $2.00 dividend and sold the stock for $31.00. What was your holding period return? 6. a. 45% b. 50% c.60% d. 40% e. None of the above. 7. When an investment advisor attempts to determine an investor's risk tolerance, which factor would they be least likely to assess? a. The investor's prior investing experience. b. The investor's degree of financial security c. The investor's tendency to make risky or conservative choices. d. The level of return the investor prefers. e. The investor's feelings about losses. f. None of the above. 8. Treasury bills are commonly viewed as risk free assets because: Their short term nature makes their values insensitive to interest rate fluctuations. The inflation uncertainty over their time to maturity is negligable. Their term to maturity is identical to most investors desired holding periods. Their short term nature makes their values insensitive to interest rate fluctuations and the inflation uncertainty over their time to maturity is negligble. The inflation uncertainty over their time to maturity is negligble and their term to maturity is identical to most investors desired holding periods. None of the above. a. b. c. d. e. f