QUESTION 8

1. You have the following rates of return for a risky portfolio for several recent years:

Year Return

2008 -20%

2009 30%

2010 5%

The annualized (geometric) average return on this investment is _

QUESTION 9

1. Suppose you pay $9,500 for a $10,000 par Treasury bill maturing in 9 months. What is the effective annual rate of return for this investment?

QUESTION 10

1. The price of a stock is $55 at the beginning of the year and $50 at the end of the year. If the stock paid a $2 dividend and inflation was 2%, what is the real holding-period return for the year?