Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Please help. Thank you! 11.You buy a T-bill maturing in 6 month. The effective annual rate (EAR) is 15%. What is the APR(annual percentage rate)

Please help. Thank you! image text in transcribed
11.You buy a T-bill maturing in 6 month. The effective annual rate (EAR) is 15%. What is the APR(annual percentage rate) from this T-bill. A) 14.48% B) 15.48% C) 16.48% D) 17.48% 12. The dividend yield plus the capital gains yield equals holding period of return of a stock A) True B) False 13. Suppose you pay $9,500 for a Treasury bill maturing in 3 months. What is the effective annual rate of return for this investment? A) 5.8% B) 10.8% C) 17.8% D) 22.8% 14. Standard deviation of returns is a measure of ( ) risk. A) total B) market C) idiosyncratic D) diversifiable 15. Beta is a measure of ( ) risk. A) total B) market C) idiosyncratic D) diversifiable 16. Small firm effect (size effect) is most pronounced in a) December b) January c) February d) March 17. Consider the following two investment alternatives. First, a risky portfolio that pays 15% rate of return with a probability of 60% or 5% with a probability of 40%. Second, a treasury bill that pays 6%. The risk premium on the risky investment is A) 1% B) 5% C) 9% D) 11% 18. If the simple CAPM is valid, which of the situation is possible? a) b) \begin{tabular}{lcc} \hline Portfolio & Expectedreturn & StandardDeviation \\ \hline A & 30% & 35% \\ B & 40% & 25% \\ \hline \end{tabular} c) d) Portfolio Expected Beta retur n \begin{tabular}{lll} \hline Risk free & 10% & 0 \\ Market & 18% & 1.0 \\ A & 16% & 0.9 \\ \hline \end{tabular}

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Quantitative Financial Risk Management

Authors: Constantin Zopounidis, Emilios Galariotis

1st Edition

1118738187, 978-1118738184

More Books

Students also viewed these Finance questions