The average squared difference between the actual return and the average return is called the:
volatility return.
variance.
standard deviation.
risk premium.
excess return.
The excess return you earn by moving from a relatively risk-free investment to a risky investment is
called the:
geometric average return.
inflation premium.
risk premium.
time premium.
arithmetic average return.
Which one of the following types of securities has tended to produce the lowest real rate of return for
the period 1926 through 2014?
U.S. Treasury bills
long-term government bonds
small company stocks
large company stocks
long-term corporate bonds
Which one of the following is a correct statement concerning risk premium?
The greater the volatility of returns, the greater the risk premium.
The lower the volatility of returns, the greater the risk premium.
The lower the average rate of return, the greater the risk premium.
The risk premium is not correlated to the average rate of return.
The risk premium is not affected by the volatility of returns.
In estimating the future equity risk premium, it is important to include assumptions about the:
historical distribution of returns on derivative securities only.
future risk environment only.
amount of risk aversion of future investors only.
historical distribution of returns on derivative securities and the future risk environment.
future risk environment and the amount of risk aversion of future investors.
One year ago, you purchased a stock at a price of $32.50. The stock pays quarterly dividends of
$.40 per share. Today, the stock is worth $34.60 per share. What is the total dollar return per share
to date from this investment?
rev: 06_21_2016_QC_CS-54260
$3.40
$3.70
$2.10
$2.50
$3.80
A year ago, you purchased 500 shares of New Tech stock at a price of $49.03 per share. The stock
pays an annual dividend of $.10 per share. Today, you sold all of your shares for $58.14 per share.
What is your total dollar return on this investment?
$4,755
$4,733
$4,753
$4,605
$4,853
One year ago, you purchased a stock at a price of $32 a share. Today, you sold the stock and
realized a total return of 14.62 percent. Your capital gain was $3.48 a share. What was your dividend
yield on this stock?
2.25%
3.75%
3.35%
2.85%
4.35%
Eight months ago, you purchased 400 shares of Winston stock at a price of $46.40 a share. The
company pays quarterly dividends of $1.05 a share. Today, you sold all of your shares for $48.30 a
share. What is your total percentage return on this investment?
10.12%
4.09%
8.62%
