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44) One year ago, you purchased 200 shares of Southern Foods common stock for $39.50 a
share.
Today, you sold your shares for $35.40 a share. During this past year, the stock paid $1.25 in
dividends per share. What is your dividend yield on this investment?
A) 3.165 percent
B) 3.375 percent
C) 3.442 percent
D) 3.533 percent
E) 3.610 percent
45) You purchased a stock for $25.50 a share, received a dividend of $0.70 per share, and sold
the stock after one year for $28.55 a share. What was your dividend yield on this investment?
A) 2.30 percent
B) 2.38 percent
C) 2.45 percent
D) 2.67 percent
E) 2.75 percent
46) One year ago, you purchased 500 shares of stock at a cost of $10,500. The stock paid an
annual dividend of $1.10 per share. Today, you sold those shares for $23.90 each. What is the
capital gains yield on this investment?
A) 9.96 percent
B) 10.52 percent
C) 12.49 percent
D) 13.81 percent
E) 14.75 percent
47) Today, you sold 800 shares of DeSoto Inc., for $57.60 a share. You bought the shares one
year ago at a price of $61.20 a share. Over the year, you received a total of $500 in dividends.
What is your capital gains yield on this investment?
A) -6.03 percent
B) -5.88 percent
C) -4.86 percent
D) 6.25 percent
E) 7.34 percent
48) One year ago, you purchased 300 shares of Southern Cotton at $32.60 a share. During the
past year, you received a total of $280 in dividends. Today, you sold your shares for $35.80 a
share. What is your total return on this investment?
A) 8.79 percent
B) 9.64 percent
C) 10.16 percent
D) 11.64 percent
E) 12.68 percent
49) You purchased a stock for $50.00 a share and resold it one year later. Your total return for
the year was 11.5 percent and the dividend yield was 2.8 percent. At what price did you resell the
stock?
A) $42.78
B) $50.62
C) $51.93
D) $52.08
E) $54.35
50) A stock sold for $25 at the beginning of the year. The end of year stock price was $25.70.
What is the amount of the annual dividend if the total return for the year was 7.7 percent?
A) $1.23
B) $1.38
C) $1.60
D) $1.81
E) $2.31
51) Todd purchased 600 shares of stock at a price of $68.20 a share and received a dividend of
$1.42 per share. After six months, he resold the stock for $71.30 a share. What was his total
dollar return?
A) $1,008
B) $1,860
C) $2,712
D) $3,211
E) $3,400
52) Christine owns a stock that dropped in price from $43.80 to 39.49 over the past year. The
dividend yield on that stock is 1.8 percent. What is her total return on this investment for the
year?
A) -11.31 percent
B) -10.49 percent
C) -9.91 percent
D) -9.59 percent
E) -8.04 percent
53) You have been researching a company and have estimated that the firm's stock will sell for
$44 a share one year from now. You also estimate the stock will have a dividend yield of 2.18
percent. How much are you willing to pay per share today to purchase this stock if you desire a
total return of 15 percent on your investment?
A) $37.55
B) $38.00
C) $38.24
D) $39.00
E) $40.20
54) Shane purchased a stock this morning at a cost of $13 a share. He expects to receive an
annual dividend of $0.27 a share next year. What will the price of the stock have to be one year
from today if Shane is to earn a 8 percent rate of return on this investment?
A) $12.38
B) $12.60
C) $12.88
D) $13.77
E) $14.28
55) Ellen just sold a stock and realized a 5.8 percent return for a 5-month holding period. What
was her annualized rate of return?
A) 11.98 percent
B) 14.49 percent
C) 19.78 percent
D) 21.29 percent
E) 27.20 percent
56) You purchased a stock eight months ago for $36 a share. Today, you sold that stock for
$41.50 a share. The stock pays no dividends. What was your annualized rate of return?
A) 23.32 percent
B) 24.77 percent
C) 25.70 percent
D) 26.03 percent
E) 27.67 percent
57) Eight months ago, you purchased 300 shares of a non-dividend paying stock for $27 a share.
Today, you sold those shares for $31.59 a share. What was your annualized rate of return on this
investment?
A) 17.00 percent
B) 21.45 percent
C) 25.50 percent
D) 26.55 percent
E) 28.00 percent
58) Jack owned a stock for five months and earned an annualized rate of return of 6 percent.
What was the holding period return?
A) 2.37 percent
B) 2.42 percent
C) 2.46 percent
D) 2.64 percent
E) 2.72 percent
59) Scott purchased 200 shares of Frozen Foods stock for $48 a share. Four months later, he
received a dividend of $0.22 a share and also sold the shares for $42 each. What was his
annualized rate of return on this investment?
A) -44.69 percent
B) -40.14 percent
C) -33.00 percent
D) -31.95 percent
E) -28.07 percent
60) A stock has an average historical risk premium of 5.6 percent. The expected risk-free rate for
next year is 2.4 percent. What is the expected rate of return on this stock for next year?
A) 6.50 percent
B) 7.53 percent
C) 8.00 percent
D) 9.34 percent
E) 11.70 percent
61) Last year, ABC stock returned 11.43 percent, the risk-free rate was 3.0 percent, and the
inflation rate was 2.5 percent. What was the risk premium on ABC stock?
A) 8.20 percent
B) 8.43 percent
C) 8.60 percent
D) 8.88 percent
E) 8.97 percent
62) Over the past four years, Jellystone Quarry stock produced returns of 12.5, 15.1, 8.7, and 2.6
percent, respectively. For the same time period, the risk-free rate 4.7, 5.3, 3.9, and 3.4 percent,
respectively. What is the arithmetic average risk premium on this stock during these four years?
A) 5.13 percent
B) 5.25 percent
C) 5.40 percent
D) 5.83 percent
E) 5.97 percent
63) Over the past five years, Teen Clothing stock produced returns of 18.7, 5.8, 7.9, 10.8, and
11.6 percent, respectively. For the same five years, the risk-free rate 5.2, 3.4, 2.8, 3.4, and 3.9
percent, respectively. What is the arithmetic average risk premium on Teen Clothing stock for
this time period?
A) 6.89 percent
B) 7.01 percent
C) 7.22 percent
D) 7.34 percent
E) 7.57 percent
64) Over the past ten years, large-company stocks have returned an average of 9.8 percent
annually, long-term corporate bonds have earned 4.6 percent, and U.S. Treasury bills have
returned 3.0 percent. How much additional risk premium would you have earned if you had
invested in large-company stocks rather than long-term corporate bonds over those ten years?
A) 1.7 percent
B) 3.7 percent
C) 5.2 percent
D) 5.8 percent
E) 8.1 percent
65) An asset had annual returns of 12, 18, 6, -9, and 5 percent, respectively, for the last five
years. What is the variance of these returns?
A) 0.00810
B) 0.01013
C) 0.01065
D) 0.02038
E) 0.04052
66) Over the past five years, Southwest Railway stock had annual returns of 10, 14, -6, 7.5, and
16 percent, respectively. What is the variance of these returns?
A) 0.00548
B) 0.00685
C) 0.00770
D) 0.01370
E) 0.02740
67) An asset had returns of 7.7, 5.4, 3.6, -4.2, and -1.3 percent, respectively, over the past five
years. What is the variance of these returns?
A) 0.00173
B) 0.00184
C) 0.00216
D) 0.00240
E) 0.00259
68) An asset had annual returns of 13, 10, -14, 3, and 36 percent, respectively, for the past five
years. What is the standard deviation of these returns?
A) 8.96 percent
B) 16.05 percent
C) 17.92 percent
D) 18.09 percent
E) 20.03 percent
69) Over the past four years, a stock produced returns of 13, 6, -5, and 18 percent, respectively.
What is the standard deviation of these returns?
A) 8.63 percent
B) 9.93 percent
C) 9.97 percent
D) 10.11 percent
E) 10.15 percent
70) Downtown Industries common stock had returns of 7.2, 11.5, 10.5, and 7.5 percent,
respectively, over the past four years. What is the standard deviation of these returns?
A) 2.15 percent
B) 2.38 percent
C) 2.41 percent
D) 2.59 percent
E) 2.82 percent
71) An asset has an average annual historical return of 11.6 percent and a standard deviation of
17.8 percent. What range of returns would you expect to see 95 percent of the time?
A) -41.8 to + 65.0 percent
B) -34.4 to + 53.6 percent
C) -24.0 to + 47.2 percent
D) -6.2 to + 29.4 percent
E) -5.4 to + 41.0 percent
72) A stock has an average historical return of 11.3 percent and a standard deviation of 20.2
percent. Which range of returns would you expect to see approximately two-thirds of the time?
A) -23.8 to + 53.0 percent
B) +4.6 to + 33.8 percent
C) +5.8 to + 31.6 percent
D) -3.9 to + 32.5 percent
E) -8.9 to + 31.5 percent
73) An asset has an average historical rate of return of 13 percent and a variance of 0.0106. What
range of returns would you expect to see approximately two-thirds of the time?
A) -2.28 to + 24.48 percent
B) -6.52 to + 32.92 percent
C) -9.58 to + 38.8 percent
D) +2.70 to + 23.30 percent
E) +13.1 to + 13.3 percent
74) Jeremy owns a stock that has historically returned 7.5 percent annually with a standard
deviation of 10.2 percent. There is only a 0.5 percent chance that the stock will produce a return
greater than ________ percent in any one year.
A) 20.9
B) 22.9
C) 32.2
D) 38.1
E) 54.8
75) Jefferson Mills stock produced returns of 14.8, 22.6, 5.9, and 9.7 percent, respectively, over
the past four years. During those same years, U.S. Treasury bills returned 3.8, 4.6, 4.8, and 4.0
percent, respectively, for the same time period. What is the variance of the risk premiums on
Jefferson Mills stock for these four years?
A) 0.00298
B) 0.00196
C) 0.00396
D) 0.00478
E) 0.00528
76) Over the past four years, the common stock of Jess Electronics Co. produced annual returns
of 7.2, 5.8, 11.2, and 13.6 percent, respectively. Treasury bills produced returns of 3.4, 3.3, 4.1,
and 4.0 percent, respectively over the same period. What is the standard deviation of the risk
premium on Jess Electronics Co. stock for this time period?
A) 2.23 percent
B) 2.86 percent
C) 3.22 percent
D) 4.46 percent
E) 4.61 percent
77) Big Town Markets common stock returned 13.8, 14.2, 9.7, 5.3, and 12.2 percent,
respectively, over the past five years. What is the arithmetic average return?
A) 10.99 percent
B) 11.04 percent
C) 11.56 percent
D) 12.20 percent
E) 13.80 percent
78) Over the past four years, Hi-Tech Development stock returned 35.2, 38.8, 18.4, and -32.2
percent annually. What is the arithmetic average return?
A) 15.05 percent
B) 17.67 percent
C) 20.53 percent
D) 24.20 percent
E) 32.25 percent
79) You own a stock that has produced an arithmetic average return of 8.6 percent over the past
five years. The annual returns for the first four years were 16, 11, -19, and 3 percent,
respectively. What was the rate of return on the stock in year five?
A) -5.00 percent
B) 2.75 percent
C) 6.25 percent
D) 28.00 percent
E) 32.00 percent
