True False 0 1. The HPR can never be negative. 0 o the HPR > 100% 2. If a stock grows from $100 to $120 in one year, o O 3. The HPY in the preceding problem > 100%. 0 0 4. If a stock grows from $100 to $120 in three years, the AHPY 10% 8. Ending market values are used for the market 0 O weights of the stocks 0 o 20% and a 40% in a portfolio when calculating a portfolio return 9. If a stock has a 60% probability of returning probability of losing 20%, the expected retur 5%. O o Problem 921% 10. The standard deviation of the returns in 0 O 11. If the real rate is 10% and the inflation rate is 3%, the nominal rate > 12%. 0 O 12. It is fair to think of T-bills as the RRFR. o 13. If the NRFR = 9% and the inflation rate is 4% - 2%, the RRFR > 12% 14. The arithmetic and geometric means can never o 0 be the same. O 0 15. It is easier to diversify away systematic risk than unsystematic risk. 0 o 16. When graphing the security market line, risk is arrayed along the vertical axis 0 0 17. The market risk premium would be the same for both high and low risk stocks. 0 O 18. The greater the rate of inflation, the greater the slope of the SML will be o o 19. The strength of the dollar and the return on foreign investments are negatively related O 20. The higher the AM. the higher the CV True False O 1. The HPR can never be negative. O O the HPR > 100%. 2. If a stock grows from $100 to $120 in one year, O 3. The HPY in the preceding problem > 100%. O O 4. If a stock grows from $100 to $120 in three years, the AHPY 10%. 8. Ending market values are used for the market O O weights of the stocks in a portfolio when calculating a portfolio return. 9. If a stock has a 60% probability of returning 0 0 20% and a 40% probability of losing 20%, the expected return 5%. O o Problem #9 12%. O 12. It is fair to think of T-bills as the RRFR. O 13. If the NRFR = 9% and the inflation rate is 4% = 2%, the RRFR > 12%. 14. The arithmetic and geometric means can never O O be the same. 14. The arithmetic and geometric means can never 0 O be the same. 0 15. It is easier to diversify away systematic risk than unsystematic risk. O 16. When graphing the security market line, risk is arrayed along the vertical axis. O O 17. The market risk premium would be the same for both high and low risk stocks. O 0 18. The greater the rate of inflation, the greater the slope of the SML will be. O O 19. The strength of the dollar and the return on foreign investments are negatively related. O O 20. The higher the AM, the higher the CV
