Multiple Choice Test Bank Questions No Feedback – Chapter 1
Correct answers denoted by an asterisk.
1. Financial econometrics can best be described as
2. Which of the following is a serious problem encountered by applied
econometricians in economics?
3. Which of these is a characteristic of financial data?
4. Data that have been collected over a period of time on one or more variables is
referred to as
5. Data that have been collected on one or more variables at a single point in time is
referred to as
6. Data that have both time series and cross-sections is referred to as
7. An individual invested £106.40 in the stock market and the value of his investment
8. An individual has £10000 capital to invest in the stock market. He invests 30% of
his capital in stock A, 25% in stock B and 45% in Stock C. What is the return on
his/her portfolio assuming that the simple returns on stocks A, B and C are 5%, 10%
and 12%, respectively?
The average nominal annual rent in the US denominated in dollars and the CPI (2008
levels) are given in the table below:
Year
Average annual rent (US
Dollars)
CPI (2008 levels)
2008
9908
100
2009
9998
99.7
2010
10012
101.3
2011
10180
104.5
2012
10396
106.7
9. What is the 2008 average annual rent in 2012 terms?
10. What is the 2012 average annual rent in 2008 terms?
11. The numerical score assigned to the credit rating of a bond is best described as
what type of number?
12. Suppose that we wanted to sum the 2007 returns on ten shares to calculate the
return on a portfolio over that year. What method of calculating the individual stock
returns would enable us to do this?