QUESTION 6 Assume that investors, to calculate the Holding Period Rate of retum, decided to use the formula (P1-P) P1, instead of the formula P:-Po) PO Then, the ranking of investments with respect to their HPR would O a be reversed O b.remain unchanged Oc.be unpredictably different O d.carmot tell QUESTION 7 Assume that stock A was purchased for $100 at t= 0 and sold for $125 at t= 3. Also assume that the stock paid a $12 dividend in each of the three years that it was onmed. Given the above information we may conclude that the IRR of this investment lies between O a. 16.3% and 16.90% b.20.20% and 20.80% OC-224% and 23.00% O d. 18.70% and 19.30% QUESTIONS The average rate of retum measure takes time of value money into account True False QUESTION 9 Assume that an investor bought a stock today (t=0) for $105 and sold it for $140 at 13. During the last year of his onrership the stock paid a dividend of 56. The price of the stock 21 tl was $115 and $130 at t=2. If the price of the stock had been $125 at t=2, then the Geometric mem rate of return would have been O a higher O bthe same Occamot tell O d.lower QUESTION 10 All else equal if the expected rate of retum on a stock that is part of a well diversified portfolio increases by 1%, the expected rate of retum on tiezt portfolio will also increase by 1% True O False