Hi Patrick, I have 55 minutes to get this submitted…thanks!
| 1.You bought stock for $115.35 per share. One year later, you sold it for $99.70. What is the holding period (historical or realized) rate of return on your investment? (Points : 1) |
86.4%
-13.57%
-$15.65
-15.70% |
| Question 2.2.You bought stock for $25.47 per share. One year later, you sold it for $45.85. What is the holding period (historical or realized) rate of return on your investment? (Points : 1) |
80.02%
20.38%
44.44%
1.80%
|
| Question 3.3.You are considering a $7,000 investment. The table below shows the possible outcomes in cash flow next year. What is the expected rate of return on this asset?
(Points : 1) |
$221.89
6%
3.3%
0.03% |
Question 4.4.You are considering a $3,500 investment. The table below shows the possible outcomes in cash flow next year. What is the standard deviation of the returns?
(Points : 1) |
0.45%
4.7%
8.3%
6.72% |
| Question 5.5.The expected rate of return for an investment in a start-up solar energy company is 38%, but the standard deviation is 12%. By contrast, the expected rate of return for an investment in an established cosmetic company with a promising new line is 22% with a standard deviation of 6%. Which of the following statements is FALSE? (Points : 1) |
Investing with the start-up solar energy company involves the most risk.
Investing with the start-up solar energy company has the highest rate of return.
Investing with the cosmetic company involves the most risk.
Investing with the cosmetic company has the lowest rate of return. |
| Question 6.6.Assume you have two assets. Asset X has an expected return of 15% and a standard deviation of 9%. Asset Y has an expected return of 21% and a standard deviation of 15.2%. Use the coefficient of variation to calculate the risk of each asset. (Points : 1) |
Asset Y with a CV of .600, Asset X with a CV of .720
Asset Y with a CV of .720, Asset X with a CV of .600
Asset Y with a CV of .640, Asset X with a CV of .680
Asset Y with a CV of .690, Asset X with a CV of .642 |
| Question 7.7.Use the following formula to calculate the standard deviation of the portfolio described in the table below. Assume that the correlation between the two assets is 25%.
(Points : 1) |
18.7%
43.3%
10.2%
32% |
| Question 8.8.Use the following formula to calculate the standard deviation of the portfolio described in the table below. Assume that the correlation between the two assets is -35%.
(Points : 1) |
5.3%
23.1%
13.8%
37% |
| Question 9.9.________ is related to unique events that impact one asset’s overall variability. (Points : 1) |
Firm-specific risk
Total risk
Market-specific risk
Personal risk |
| Question 10.10.A correlation coefficient of 0.76 indicates that ________. (Points : 1) |
as one asset increases, the other decreases
the two assets are weakly correlated
the two assets are highly correlated
only one asset is profitable
|
| Question 11.11.A firm’s ________ includes the variance due to unique events affecting single companies as well as widespread events that span multiple industries. (Points : 1) |
total risk
market risk
unsystemic risk
diversifiable risk |
| Question 12.12.Historical returns have been more volatile than the overall market returns if any beta is greater than ________. (Points : 1) |
three
five
one
two |
| Question 13.13.The capital asset pricing model, or CAPM, is the tool we use to calculate the ________. (Points : 1) |
expected return
real return
required return
projected return |
| Question 14.14.Assume the current T-bill rate is 4% and the market return is 12%. What is the expected return on a stock with a beta of 0.98? (Points : 1) |
12.66%
11.84%
10.86%
11.26% |
|
Question 15.15.All ________ should plot on the security market line, assuming markets are efficient. (Points : 1)
|
betas
assets
profit
gains |
