Home
Browse
Create
Search
Log in
Sign up
Upgrade to remove ads
Only $2.99/month
Investments Ch 5
STUDY
Flashcards
Learn
Write
Spell
Test
PLAY
Match
Gravity
Terms in this set (15)
You put up $50 at the beginning of the year for an investment. The value of the investment grows 4% and you earn a dividend of $3.50. Your HPR was
11.00%
Rank the following from highest average historical return to lowest average historical return from 1926-2008.
I. Small stocks
II. Long term bonds
III. Large stocks
IV. T-bills
I, III, II, IV
Your investment has a 20% chance of earning a 30% rate of return, a 50% chance of earning a 10% rate of return and a 30% chance of losing 6%. What is your expected return on this investment?
9.2%
Historical returns have generally been __________ for stocks of small firms as/than for stocks of large firms
higher
When calculating the variance of a portfolio's returns squaring the deviations from the mean results in ________.
I. preventing the sum of the deviations from always equaling zero
II. exaggerating the effects of large positive and negative deviations
III. a number in units of percentage of returns
I and II only
A portfolio with a 25% standard deviation generated a return of 15% last year when T-bills were paying 4.5%. This portfolio had a Sharpe measure of __
0.42
The holding period return on a stock was 32%. Its beginning price was $25 and its cash dividend was $1.50. Its ending price must have been
$31.50
You invest $1,000 in a complete portfolio. The complete portfolio is composed of a risky asset with an expected rate of return of 16% and a standard deviation of 20% and a treasury bill with a rate of return of 6%.
__________ of your complete portfolio should be invested in the risky portfolio if you want your complete portfolio to have a standard deviation of 9%
45%
You invest $1,000 in a complete portfolio. The complete portfolio is composed of a risky asset with an expected rate of return of 16% and a standard deviation of 20% and a treasury bill with a rate of return of 6%.
The slope of the capital allocation line formed with the risky asset and the risk-free asset is ________
0.50
The return on the risky portfolio is 15%. The risk-free rate as well as the investor's borrowing rate is 10%. The standard deviation of return on the risky portfolio is 20%. If the standard deviation on the complete portfolio is 25%, the expected return on the complete portfolio is ______
16.25%
You are considering investing $1,000 in a complete portfolio. The complete portfolio is composed of treasury bills that pay 5% and a risky portfolio, P, constructed with 2 risky securities X and Y. The optimal weights of X and Y in P are 60% and 40% respectively. X has an expected rate of return of 14% and Y has an expected rate of return of 10%.
To form a complete portfolio with an expected rate of return of 8%, you should invest approximately __________ in the risky portfolio. This will mean you will also invest approximately __________ and __________ of your complete portfolio in security X and Y respectively
40%, 24%, 16%
What is the geometric average return of the following quarterly returns: 3%, 5%, 4%, and 7%, respectively?
4.74%
During the 1926 to 2008 period which one of the following asset classes provided the lowest real return?
Long-Term U.S. Treasury Bonds
The rate of return on _____ is known at the beginning of the holding period while the rate of return on ____ is not known until the end of the holding period
Treasury bills, risky assets
The market risk premium is defined as ___
the difference between the return on an index fund and the return on Treasury bills
THIS SET IS OFTEN IN FOLDERS WITH...
INVEST chapter 9
70 terms
Investment Mgmt
143 terms
Fin 311- CH 9
76 terms
FIN 4310 - Investment Analysis Quiz Ch 8
86 terms
YOU MIGHT ALSO LIKE...
FIN4504 Chapter 5
69 terms
FIN4504 Chapter 5
69 terms
Ch. 5 more FIN 306
89 terms
FINC4310 CH5
84 terms
OTHER SETS BY THIS CREATOR
Financial Derivatives Final Study
34 terms
Investments Ch 14
15 terms
Investments Ch 12
15 terms
International Financial Management Ch 6
19 terms
OTHER QUIZLET SETS
Spine - DxImaging Q2
55 terms
Criminal Justice Final (Quiz 3)
17 terms
Soils
55 terms
CommD: Ch. 4-5
30 terms