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Unformatted text preview: Sheet1 Page 1 Questions in [New Questions] 1) A stock returned 5.8 percent, 14.9 percent, -4.8 percent, and 7.4 percent for each of the last 4 years, respectively. Given th [ ] -2.29 v [ ] -10.41 [ ] -9.36 [ ] -3.63 [ ] 2.29 2) Assume the annual return on a share of stock is normally distributed, the average return is 13.6 percent, and the standard d [ ] 3.3 [ ] -3.3 [ ] -14.7 [ ] -15.25 v [ ] -20.2 3) Devon loves risk. He recently purchased a stock with an expected rate of return of 15.8 percent and a standard deviation o [ ] 0.00 v [ ] 0.13 [ ] 2.28 [ ] 15.87 [ ] 18.40 4) Over a 15-year period, a security has an arithmetic average return of 13.2 percent and a geometric average return of 10.8 p [ ] 9.44 percent [ ] 9.87 percent [ ] 10.47 percent [ ] 10.84 percent v [ ] 11.66 percent 5) Last year on this date, you purchased 1,000 shares of preferred stock for $50.50 per share. The stock pays an annual divid [ ] $1,500 [ ] $1,650 [ ] $7,700 v [ ] $8,500 [ ] $9,000 6) The normal distribution is useful in analyzing security returns because: [ ] the data set of a normal distribution contains less than 100 data points. [ ] the normal distribution is defined by the geometric average rate of return. [ ] 99 percent of all observations fall within two standard deviations of the mean. [ ] the security returns become less symmetrical as the number of observations increases. v [ ] it can be completely described by its mean and standard deviation. 7) Theresa purchased 600 shares of Black Tower Records stock at a price of $37.92 per share. One year later, the shares we v [ ] $0 [ ] $1,440 [ ] $1,880 [ ] $2,220 [ ] $2,880 8) The common stock of Schuyler Farms has returned 6.2 percent, 12.8 percent, 1.4 percent, and 7.9 percent over the past 4 Sheet1 Page 2 [ ] -10.99 [ ] -9.44 [ ] -2.37 [ ] -2.37 v [ ] -2.34 9) Over the period of 1926 to 2005, the risk premium on long-term corporate bonds was _____ than the risk premium on large [ ] less v [ ] less [ ] less [ ] more [ ] more 10) Suppose your grandfather invested some money at the end of 1925. Based on the historical returns from 1926 to 2005, w [ ] high quality long-term corporate bonds v [ ] the common stock of the bottom fifth of stocks trading on the NYSE in terms of market value [ ] the common stock of the 500 largest firms in the U.S in terms of market value [ ] U.S. Treasury bills [ ] long-term government bonds 11) One year ago, Betty purchased 200 shares of stock at a price of $27.15 per share. The stock pays an annual dividend of [ ] $184 [ ] $184 [ ] $184 v [ ] $376 [ ] $376 12) The higher the risk premium of an investment, the: [ ] less likely that investment will produce a negative rate of return for any given year....
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This note was uploaded on 06/15/2008 for the course ACC 501 504 taught by Professor Na during the Spring '08 term at University of Texas at Austin.
- Spring '08