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Unformatted text preview: ch9 Student: _______________________________________________________________________________________ Multiple Choice Questions 1. The excess return required from a risky asset over that required from a risk-free asset is called the: A. risk premium. B. geometric premium. C. excess return. D. average return. E. variance. 2. The average squared difference between the actual return and the average return is called the: A. volatility return. B. variance. C. standard deviation. D. risk premium. E. excess return. 3. The standard deviation for a set of stock returns can be calculated as the: A. positive square root of the average return. B. average squared difference between the actual return and the average return. C. positive square root of the variance. D. average return divided by N minus one, where N is the number of returns. E. variance squared. 4. A symmetric, bell-shaped frequency distribution that is completely defined by its mean and standard deviation is the _____ distribution. A. gamma B. Poisson C. bi-modal D. normal E. uniform 5. The average compound return earned per year over a multi-year period is called the _____ average return. A. arithmetic B. standard C. variant D. geometric E. real 6. The return earned in an average year over a multi-year period is called the _____ average return. A. arithmetic B. standard C. variant D. geometric E. real 7. The excess return you earn by moving from a relatively risk-free investment to a risky investment is called the: A. geometric average return. B. inflation premium. C. risk premium. D. time premium. E. arithmetic average return. 8. The capital gains yield plus the dividend yield on a security is called the: A. variance of returns. B. geometric return. C. average period return. D. current yield. E. total return. 9. A portfolio of large company stocks would contain which one of the following types of securities? A. stock of the firms which represent the smallest 20% of the companies listed on the NYSE B. U.S. Treasury bills C. long-term corporate bonds D. stocks of firms included in the S&P 500 index E. long-term government bonds 10. Based on the period of 1926 through 2005, _____ have tended to outperform other securities over the long-term. A. U.S. Treasury bills B. large company stocks C. long-term corporate bonds D. small company stocks E. long-term government bonds 11. Which one of the following types of securities has tended to produce the lowest real rate of return for the period 1926 through 2005? A. U.S. Treasury bills B. long-term government bonds C. small company stocks D. large company stocks E. long-term corporate bonds 12. On average, for the period 1926 through 2005: A. the real rate of return on U.S. Treasury bills has been negative....
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This note was uploaded on 12/21/2011 for the course NIKA 101 taught by Professor Temur during the Spring '11 term at Acton School of Business.

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ch9 - ch9 Student:

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