QUESTION 1

One year ago, you purchased 300 shares of Southern Cotton at $32.60 a share. During the past year, you received a total of $280 in dividends. Today, you sold your shares for $35.80 a share. What is your total percentage return on this investment?

		8.79 percent
		9.64 percent
		10.16 percent
		11.64 percent
		12.68 percent

0.5 points

QUESTION 2

When we refer to the rate of return on an investment, we are generally referring to the:

		capital gains yield.
		effective annual rate of return.
		total percentage return.
		dividend yield.
		annualized dividend yield.

0.5 points

QUESTION 3

Which one of the following had the highest average return for the period 1926-2012?

		U.S. Treasury bills
		long-term government bonds
		large-company stocks
		small-company stocks
		intermediate-term government bonds

0.5 points

QUESTION 4

Capital gains are included in the return on an investment:

		when either the investment is sold or the investment has been owned for at least one year.
		only if the investment is sold and the capital gain is realized.
		whenever dividends are paid.
		whether or not the investment is sold.
		only if the investment incurs a loss in value or is sold.

0.5 points

QUESTION 5

Based on the period of 1926-2012, the risk premium for small-company stocks averaged:

		12.3 percent.
		13.9 percent.
		15.0 percent.
		16.8 percent.
		17.4 percent.

0.5 points

QUESTION 6

The dividend yield is defined as the annual dividend expressed as a percentage of the:

		average stock price.
		initial stock price.
		ending stock price.
		total annual return.
		capital gain.