ch9 - ch9 Student Multiple Choice Questions 1 The excess...

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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: 3. The standard deviation for a set of stock returns can be calculated as the: 4. A symmetric, bell-shaped frequency distribution that is completely defined by its mean and standard deviation is the _____ distribution. 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
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6. The return earned in an average year over a multi-year period is called the _____ average return. 7. The excess return you earn by moving from a relatively risk-free investment to a risky investment is called the: 8. The capital gains yield plus the dividend yield on a security is called the: 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. 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?
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