56.
FedEx Corp. stock ended the previous year at $113.39 per share. It paid a $0.40 per share
dividend last year. It ended last year at $126.69. If you owned 300 shares of FedEx, what
was your dollar return and percent return?
57.
Sprint Nextel Corp. stock ended the previous year at $25.00 per share. It paid a $2.57 per
share dividend last year. It ended last year at $18.89. If you owned 650 shares of Sprint,
what was your dollar return and percent return?
58.
Rank the following three stocks by their total risk level, highest to lowest. Night Ryder has
an average return of 14 percent and standard deviation of 30 percent. The average return
and standard deviation of WholeMart are 12 percent and 25 percent; and of Fruit Fly are
25 percent and 40 percent.
59.
Rank the following three stocks by their risk-return relationship, best to worst. Rail Haul
has an average return of 10 percent and standard deviation of 19 percent. The average
return and standard deviation of Idol Staff are 12 percent and 22 percent; and of Poker-R-
Us are 11 percent and 25 percent.
60.
Rank the following three stocks by their risk-return relationship, best to worst. Night Ryder
has an average return of 33 percent and standard deviation of 40 percent. The average
return and standard deviation of WholeMart are 10 percent and 20 percent; and of Fruit
Fly are 19 percent and 33 percent.
61.
An investor owns $8,000 of Adobe Systems stock, $5,000 of Dow Chemical, and $3,000 of
Office Depot. What are the portfolio weights of each stock?
62.
Consider the risk-return relationship in T-bills during each decade since 1950. Given this
data, which of the following statements is correct?
63.
Year-to-date, Oracle had earned a 15.0 percent return. During the same time period,
Valero Energy earned -12.96 percent and McDonald’s earned 1.80 percent. If you have a
portfolio made up of 50 percent Oracle, 10 percent Valero Energy, and 40 percent
McDonald’s, what is your portfolio return?
64.
The past five monthly returns for Kohl‘s are 2.55 percent, -8.62 percent, -14.44 percent, –
1.52 percent, and 4.75 percent. What is the average monthly return?
65.
The past five monthly returns for PG&E are 12.14 percent, -11.37 percent, 3.77 percent,
6.47 percent, and 3.58 percent. What is the average monthly return?
66.
Compute the standard deviation of Kohl’s monthly returns. The past five monthly returns
for Kohl’s are 5.55 percent, 8.62 percent, –4.44 percent, –1.52 percent, and 9.75 percent.
67.
Consider the characteristics of the following three stocks:
The correlation between Thumb Devices and Air Comfort is -0.12. The correlation between
Thumb Devices and Sport Garb is 0.89. The correlation between Air Comfort and Sport
Garb is -0.85. If you can pick only two stocks for your portfolio, which would you pick?
Why?
68.
If you own 300 shares of Alaska Air at $15.88, 250 shares of Best Buy at $151.00, and
1,150 shares of Ford Motor at $3.51, what are the portfolio weights of each stock?
69.
If you own 400 shares of Xerox at $15.00, 500 shares of Qwest at $10.00, and 350 shares
of Liz Claiborne at $45.00, what are the portfolio weights of each stock?
70.
At the beginning of the month, you owned $15,500 of General Motors, $4,500 of Starbucks,
and $9,000 of Nike. The monthly returns for General Motors, Starbucks, and Nike were
7.10 percent, –1.36 percent, and -0.54 percent. What is your portfolio return?
71.
You have $10,000 to invest. You want to purchase shares of Alaska Air at $50.00, Best Buy
at $50.00, and Ford Motor at $10.00. How many shares of each company should you
purchase so that your portfolio consists of 25 percent Alaska Air, 40 percent Best Buy, and
35 percent Ford Motor? Report only whole stock shares.
72.
Consider the following annual returns of Estee Lauder and Lowe’s Companies:
Compute each stock’s average return, standard deviation, and coefficient of variation.
73.
Which of the following statements is correct?
74.
Which of the following statements is correct?
75.
Which of the following statements is correct?
76.
Jane Adams invests all her money in the stock of one firm. Which of the following must be
true?
77.
Which of the following statements is correct with regards to diversification?
78.
Jenna receives an investment newsletter that recommends that she invest in a stock that
has doubled the return of the S&P 500 in the last two months. It also claims that this stock
is a “safe bet” for the future. Which of the following statements is correct regarding this
information?
79.
Which of the following is correct regarding the coefficient of variation?
80.
Which of the following is correct regarding the total risk of a company?
81.
Which of the following statements is correct regarding total risk?
82.
Which of the following statements is correct regarding total risk?