ritten on paper attached to the multiple choice answer sheet. Each section heading indicates the points fort if ol the multiple er questions choice answer sheet. Answers to the questions and problems should and problems. The multiple ch ection and a suggested time allotment. You may take more or less time for a section, but be careful not to spe o much time on one section at the expense of having time for the others. Multiple Choice Questions (15 questions, 30 points; suggested time 15 minutes) rite your answers on the multiple choice answer sheet. 1. If you want to measure the all-in performance of your investment in a fund, including the impact of the timing of your purchases and withdrawals, you should calculate the A. geometric average return B. arithmetic average return C. dollar-weighted return 2. Your portfolio's returns over the last six years ranged from +2% to +13%; the returns were positive in all six When you calculate average returns for this investment over the last six years, which of the following will be true? A. the geometric average will be less than the arithmetic average B. the geometric average will be equal to the arithmetic average C. the geometric average will be greater than the arithmetic average D. can't tell from the above 3. Over the last five years, your stock portfolio had years of gains and years of losses. You invested more in your portfolio right before prices went up and you sold right before prices went down. When you calculate average returns, which of the following will be true A. the geometric average will be higher than the arithmetic average B. the dollar weighted average will be higher than the geometric average C. the arithmetic and geometric averages will be the same D. none of the above You bought 50 shares of a stock and held them for four years. stock and you sold the stock for $40 per share at the end of four years. The stock didn't pay any dividends What was the annualized holding period return for this investment? 4. You paid $50 per share when you bought the A. -5.00% B. -5.43% C. -5.74% D.-20.00% 5. You purchased a six-month Treasury bill for S$1,000. At the end of the six months, the Treasury bill paid you $1,030. (There were no other cash flows related to this investment.) What was the annualized holding period return for this investment? A. 3.00% B. 6.00% C. 6.09% D. 12.55% Diversification is most effective when the returns on your investments are A. high B. negatively correlated C. positively correlated D. uncorrelated Page I or s