Because debt is riskier than equity, the cost of debt is typically higher than the cost of equity.

Group of answer choices

True

False

Typically, the expected return for a company's stock is estimated using historical returns for the stock.

Group of answer choices

True

False

On January 1, 2022, the price of Stock X was $200.00. On January 2, 2022, the company paid a dividend of $10 per share. On January 31, 2022, the price of Stock X was $239.00. The dividend yield for the stock was 20%.

Group of answer choices

True

False

The realized return for a Stock X for March 2022 was 7%, and the dividend yield was 8%. The capital gain rate for Stock X for March 2022 was +1%.

Group of answer choices

True

False

For Stock Z, the following three monthly returns were realized: Month 1 = 5%, Month 2 = 14%, Month 3 = -8%. The return for the three-month period isnotfound by calculating the average monthly return (i.e., add the three monthly returns and divide by three).

Group of answer choices

True

False

The volatility of a stock's return is measured by the standard deviation of the stock's returns.

Group of answer choices

True

False

There is an inverse relationship between the volatility of returns and the average returns for individual stocks.

Group of answer choices

True

False

Portfolios with a large number of stocks tend to have lower volatility than portfolios with a small number of stocks.

Group of answer choices

True

False

The market risk of a stock is an example of independent risk.

Group of answer choices

True

False

The exposure of a company's stock to an earthquake near its main facilities is an example of unsystematic risk.

Group of answer choices

True

False

Total risk is the sum of systematic risk and undiversifiable risk.

Group of answer choices

True

False