quiz3_sol - NAME (PRINT IN FULL ON LINES BELOW) (First...

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NAME (PRINT IN FULL ON LINES BELOW) (First Name) (Last Name) FIN 300 Professor Wang Midterm Quiz 3 T HERE ARE 8 P AGES IN THIS EXAM . P LEASE CHECK TO MAKE SURE THAT YOU HAVE ALL PAGES . You have 45 minutes to complete this examination. All answers must be recorded on the examination. Many questions ask that some value or values be calculated. For questions 3 and 4, you must show on the exam itself the reasoning you used to obtain your answers and any intermediate steps involved in the calculations to obtain full credit. Print your name at the top of the first page.
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2 1. (5 points) True or False? a.) Short-term investors care about only short-term performance of the company, therefore, they will disagree with the long-term investors about corporate policy. ± True ± False Answer: False b.) Constant expected growth model is a good valuation model for start-up companies. ± True ± False Answer: False c.) Risk premium is the reward for investor’s risk-taking. ± True ± False Answer: True d.) There is a positive relationship between volatility and average returns for individual stocks. ± True ± False Answer: False e.) Investors receive a risk premium only for market risks. ± True ± False Answer: True
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3 2. (5 points) The following are multiple-choice questions. There is a unique answer to each question. Check the box next to your answer. a)
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This document was uploaded on 10/21/2010.

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quiz3_sol - NAME (PRINT IN FULL ON LINES BELOW) (First...

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