CH12AQZV7 - Chapter 12 Quiz A Student Name _ _ 1. Student...

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Chapter 12 Quiz A Student Name _________________________ Student ID ____________ ________ 1. Between 1926 and 2003, large company stocks produced an average rate of return of _____ percent. a. 10.9 b. 11.3 c. 12.4 d. 13.7 ________ 2. Over the period 1926 to 2003, long-term corporate bonds produced an average return of 6.2 percent, inflation averaged 3.1 percent, and U.S. Treasury bills returned an average 3.8 percent. What was the average real rate of return on long-term corporate bonds for this time period? a. -.07 percent b. 3.1 percent c. 3.8 percent d. 6.2 percent ________ 3. Which one of the following statements is true? a. The higher the expected return, the smaller the risk premium. b. The risk premium on long-term government bonds historically has exceeded the risk premium on long- term corporate bonds. c. The risk premium is the excess return required from a risky asset over that required for a risk-free asset. d. The risk premium assigned to the U.S. Treasury bill is 1.0 percent. ________ 4. One year ago, you purchased a stock at a price of $48.06 a share. You have received quarterly dividends of $.20 a share. Today, you sold this stock for $51.23 a share. What is your capital gains yield on this investment? a. 3.17 percent b. 6.2 percent c. 6.6 percent d. 8.3 percent ________ 5. Seven months ago, you purchased 300 shares of WAC, Inc. stock at a price of $23.80 a share. You have received dividends totaling $.60 a share. Today, you sold your shares at a price of $22.20 a share. What is your total percentage return on this investment? a. -6.7 percent b. -4.2 percent c. 7.2 percent d. 9.9 percent ________ 6. A stock has produced returns of 9 percent, 13 percent, -8 percent and 3 percent over the past four years. What is the 68 percent probability range of returns? a. -4.89 to 9.14 percent b. -4.89 to 13.39 percent c. 4.25 to 9.14 percent d. 4.25 to 13.39 percent ________ 7. A stock has produced average annual returns of 8 percent, 18 percent, -2 percent, and 3 percent over the past four years. What is the geometric average rate of return? a. 5.75 percent b. 6.50 percent c. 6.75 percent d. 7.00 percent ________ 8. Semistrong-form efficiency supports the belief that the financial markets reflect: a. only historical price information. b. all private information. c. all public information. d. all information of any kind. ________ 9. You own 600 shares of Elder, Inc. stock. This stock has an expected capital gains yield of 4.3 percent, an expected total return of 8.5 percent, and a stock price of $32.40. How much dividend income do you expect to receive over the course of a year? a. $816.48
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This note was uploaded on 05/29/2010 for the course FIN 325 taught by Professor Staff during the Spring '08 term at San Diego State.

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CH12AQZV7 - Chapter 12 Quiz A Student Name _ _ 1. Student...

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