Quiz_1_answers

Quiz_1_answers - Quiz 1 Reports > Quiz Analysis Group 1...

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Quiz 1   Reports  > Quiz Analysis   Group 1 1. Which of the following concerning the relationship between risk and return is correct? A. Investors do not need to be compensated  for taking on risk. B. Investors generally demand higher return for  lower risk investments. C. Safer investments tend to have lower  returns. D. Higher risk investments guarantee higher  returns. E. Risk and return are not related.   Answer:  C 2. Which of the following concerning the relationship between risk and return is correct? A. Risk and return are inversely related. B. Investors generally require a higher return  as they take on more risk. C. Safer investments tend to have higher  returns. D. Higher risk investments historically provided  lower returns. E. Investors do not need to be compensated  for taking on risk.    Answer:  B
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  Group 2 3. Calculate the return of the below stock assuming the following. Beginning Price: $35 Ending Price: $55 Dividend: $2 A. 48.57% B. 104.0% C. 62.9% D. 42.9% E. 4.0%    Answer:  C 4. Calculate the return of the below stock assuming the following. Beginning Price: $55 Ending Price: $65 Dividend: $4 A. 68.8% B. 106.3% C. 45.5% D. 21.15% E. 25.5%    Answer:  E 5.
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Calculate the return of the below stock using the information given: Beginning Price: $40 Ending Price: $ 60 Dividend: $3 A. 20% B. 23% C. 38.3% D. 33.3% E. 57.5%    Answer:  E   Group 3 6. Which type of investment has the least amount of inherent risk? A. Treasury bills B. State Government bonds C. Corporate bonds D. Large company stock E. Small company stock     Answer:  A 7. Which type of investment has the greatest amount of expected return? A. Treasury bills B. Government bonds
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C. Corporate bonds D. Large company stock E. Small company stock     Answer:  E   Group 4 8. According to the theory of efficient capital markets, __________. A. Stock prices are not affected by  new information B. Current stock prices reflect all  publicly available information C. Stock prices adjust to new  information slowly over time D. Stock prices eventually reflect  SOME information, but not all E. Investors can easily beat the  market    Answer:  B 9. According to the Efficient Capital Market Theory: A. Current stock prices do not reflect all publicly  available information B. Stock prices react incompletely to new  information C. Stock prices react instantaneously to new  information
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D. Stock prices react erroneously to new  information E. Markets are not efficient in incorporating new 
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Quiz_1_answers - Quiz 1 Reports > Quiz Analysis Group 1...

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