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Unformatted text preview: C) the rate of return to risk aversion D) none of the above 4. The reward/variability ratio is given by __________. A) the slope of the capital allocation line B) the second derivative of the capital allocation line C) the point at which the second derivative of the investor's indifference curve reaches zero D) none of the above 5. Historical records regarding returns on stocks, Treasury bonds, and Treasury bills between 1926 and 1998 show that __________. A) stocks offered investors greater rates of return than bonds and bills B) stock returns were less volatile than those of bonds and bills C) bonds offered investors greater rates of return than stocks and bills D) bills outperformed stocks and bonds 6. If you are promised a nominal return of 12%, on a one year investment, and you expect the rate of inflation to be 3%, what real rate do you expect to earn? A) 5.48% B) 8.74% C) 9.00% D) 12.00%...
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This note was uploaded on 05/10/2008 for the course FIN 367 taught by Professor Han during the Spring '08 term at University of Texas.
- Spring '08