{[ promptMessage ]}

Bookmark it

{[ promptMessage ]}

# fmt12 - Chapter 12 Some Lessons from Capital Market History...

This preview shows pages 1–2. Sign up to view the full content.

Chapter 12 Some Lessons from Capital Market History Chapter 12 Quiz A Student Name _________________________ Student ID ____________ ________ 1. Over the period 1926-2005, small-company stocks produced an average annual return of 17.4 percent with a standard deviation of 32.9 percent. Based on this information, what is the range of returns an investor can expect to earn in any one year given a 95 percent probability range? a. -48.4 to 83.2 percent b. -32.9 to 67.7 percent c. -15.5 to 67.7 percent d. -1.9 to 50.3 percent ________ 2. Over the period 1926-2005, intermediate-term government bonds had an average annual return of 5.5 percent, U.S. Treasury bills returned 3.8 percent, and inflation averaged 3.1 percent. What was the average risk premium on intermediate-term government bonds for this time period? ________ 3. Which one of the following statements is correct? ________ 4. Which one of the following best describes the information reflected in market prices if the financial markets are semistrong form efficient? ________ 5. Over a 25-year period, a security had an arithmetic average return of 9.8 percent and a geometric average return of 8.7 percent. Based on Blume’s formula, what is the projected average rate of return on this security for the next 5 years? a. 8.27 percent b. 8.53 percent c. 8.88 percent d. 9.62 percent ________

This preview has intentionally blurred sections. Sign up to view the full version.

View Full Document
This is the end of the preview. Sign up to access the rest of the document.

{[ snackBarMessage ]}

### Page1 / 7

fmt12 - Chapter 12 Some Lessons from Capital Market History...

This preview shows document pages 1 - 2. Sign up to view the full document.

View Full Document
Ask a homework question - tutors are online