Ch12 - COURSES > FUNDAMENTALS OF CORPORATE FINANCE 9/E ROSS...

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Add, modify, and remove questions. Select a question type from the Add Question drop-down list and click Go to add questions. Use Creation Settings to establish which default options, such as feedback and images, are available for question creation. COURSES > FUNDAMENTALS OF CORPORATE FINANCE:, 9/E - ROSS > CONTROL PANEL > POOL MANAGER > POOL CANVAS Pool Canvas Add Multiple Choice Creation Settings Name Chapter 12 Some Lessons from Capital Market History Description Questions which Blackboard's assessment component is incapable of supporting are not included in the export. Instructions Add Question Here Question 1 Multiple Choice Question Last year, T-bills returned 2 percent while your investment in large-company stocks earned an average of 5 percent. Which one of the following terms refers to the difference between these two rates of return? Answer risk premium geometric return arithmetic standard deviation variance Correct Feedback Refer to section 12.3 Incorrect Feedback Refer to section 12.3 Add Question Here Question 2 Multiple Choice Question Which one of the following best defines the variance of an investment's annual returns over a number of years? Answer The average squared difference between the arithmetic and the geometric average annual returns. The squared summation of the differences between the actual returns and the average geometric return. The average difference between the annual returns and the average return for the period. The difference between the arithmetic average and the geometric average return for the period. The average squared difference between the actual returns and the arithmetic average return. Correct Feedback Refer to section 12.4 Incorrect Feedback Refer to section 12.4 Add Question Here Question 3 Multiple Choice Question Standard deviation is a measure of which one of the following? Answer average rate of return volatility probability
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risk premium real returns Correct Feedback Refer to section 12.4 Incorrect Feedback Refer to section 12.4 Add Question Here Question 4 Multiple Choice Question Which one of the following is defined by its mean and its standard deviation? Answer arithmetic nominal return geometric real return normal distribution variance risk premium Correct Feedback Refer to section 12.4 Incorrect Feedback Refer to section 12.4 Add Question Here Question 5 Multiple Choice Question The average compound return earned per year over a multi-year period is called the _____ average return. Answer arithmetic standard variant geometric real Correct Feedback Refer to section 12.5 Incorrect Feedback Refer to section 12.5 Add Question Here Question 6 Multiple Choice Question The return earned in an average year over a multi-year period is called the _____ average return. Answer arithmetic standard variant geometric real Correct Feedback Refer to section 12.5 Incorrect Feedback Refer to section 12.5 Add Question Here Question 7 Multiple Choice Question Assume that the market prices of the securities that trade in a particular market fairly reflect the available information related to those securities. Which one of the following terms best
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