Question 1

A bank pays 6% interest per year, compounded quarterly. What is the effective annual rate?

a. 5.76%

b. 6.00%

c. 6.14%

d. 6.23%

4 points

Question 2

Jones bought stock for $5000, sold it for $6500, and received no dividends. His holding period return is

a. 0%

b. 23.08%

c. 30.00%

d. 41.15%

4 points

Question 3

A stock rises 2.5% in one week. What is the annualized return?

a. 13%

b. 25%

c. 89%

d. 130%

4 points

Question 4

Which one of the following statements is true?

a. Sample variance is greater than population variance.

b. Sample variance is twice population variance.

c. Sample variance is the square root of population variance.

d. Population variance is twice sample variance.

4 points

Question 5

There is a(n) _____ relationship between risk and expected return.

a. direct

b. inverse

c. exponential

d. logarithmic