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ENGR 111, Fall 2011
QUIZ 7
ANSWER KEY
Nov 30, 2011
1. Which of the following statements are correct concerning the variance of the annual
returns on an investment?
I. The larger the variance, the more the actual returns tend to differ from the average
return.
II. The larger the variance, the larger the standard deviation.
III. The larger the variance, the greater the risk of the investment.
IV. The larger the variance, the higher the expected return.
A.
I and III only
B.
II, III, and IV only
C.
I, III, and IV only
D.
I, II, and III only
E.
I, II, III, and IV
2. A capital gain occurs when:
A.
the selling price is less than the purchase price.
B.
the purchase price is less than the selling price.
C.
there is no dividend paid.
D.
there is no income component of return.
E.
never, as they can not exist.
3. A portfolio is:
A.
a group of assets, such as stocks and bonds, held as a collective unit by an investor.
B.
the expected return on a risky asset.
C.
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 Fall '11
 MelihaBuluTaciroglu

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