pracq2.pdf - Practice Questions: Quiz 2 FIR 3710,...

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Practice Questions: Quiz 2 FIR 3710, Investments 1. The holding period return is the rate at which the investor's funds have grown over the ______. A) last year B) last quarter C) last month D) investment period 2. A probability distribution for HPRs lets us derive measurements for the ______ of the investment. A) risk B) reward C) both a and b above D) none of the above 3. The complete portfolio refers to the investment in __________. A) the risk-free asset B) the risky portfolio C) the sum of a and b D) the difference between a and b 4. The arithmetic average of 12%, 15% and 20% is _________. A) 15.7% B) 15% C) 17.2% D) 20% 5. The market risk premium is defined as ___________. A) the difference between the return on an index fund and the return on Treasury bills B) the difference between the return on a small firm mutual fund and the return on the Standard and Poor's 500 index C) the difference between the return on the risky asset with the lowest returns and the return on Treasury bills D) the difference between the return on the highest yielding asset and the lowest yielding asset. 6. The capital allocation line is also the __________. Page 1
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A) investment opportunity set formed with a risky asset and a risk-free asset B) investment opportunity set formed with two risky assets C) line on which lie all portfolios that offer the same utility to a particular investor D) line on which lie all portfolios with the same expected rate of return and different
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This note was uploaded on 11/23/2010 for the course FINANCE 08FB40447 taught by Professor Raymond during the Spring '10 term at University of Manchester.

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pracq2.pdf - Practice Questions: Quiz 2 FIR 3710,...

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