MGMT 310 Chapter 12 Assessment
One year ago, you purchased 300 shares of Davis & Saha stock at a price of $29.64 per share. The stock pays an annual dividend of $4.40 per share. Today, you sold all of your shares for $34.60 per share. What is your total dollar return on this investment?
$2808
You just sold 500 shares of stock at a price of $34.20 per share. You purchased the stock for $27.36 per share and have received total dividends of $925. What is the total capital gain on this investment?
$3,420 (500*34.20)-(500*27.36)
You've observed the following returns on Pryor Farm Produce stock over the past five years: 8 percent, −5 percent, 16 percent, 12 percent, and 8 percent. What is the variance of these returns?
0.00622
One year ago, you purchased a stock at a price of $38.22 per share. Today, you sold the stock and realized a total loss of 11.09 percent on your investment. Your capital loss was −$4.68 per share. What was your dividend yield?
1.15%
Over a 25-year period an asset had an arithmetic return of 13.1 percent and a geometric return of 12.6 percent. Using Blume's formula, what is your best estimate of the future annual returns over the next 10 years?
12.91%
Assume you invest in a portfolio of long-term corporate bonds. Based on the period 1926-2019, what average annual rate of return should you expect to earn?
Between 6 and 7 percent
A stock has an expected rate of return of 9.8 percent and a standard deviation of 15.4 percent. Which one of the following best describes the probability that this stock will lose at least half of its value in any one given year?
Less than 0.5 percent
A stock had annual returns of 5.3 percent, −2.7 percent, 16.2 percent, and 13.6 percent over the past four years. Which one of the following best describes the probability that this stock will produce a return of 20 percent or more in a single year?
Less than 16 percent but more than 2.5 percent
Which one of the following statements correctly applies to the period 1926-2019?
Long-term corporate bonds outperformed long-term government bonds.
Which one of the following statements is correct based on the historical record for the period 1926-2019?
Long-term government bonds had a lower return but a higher standard deviation, on average, than did long-term corporate bonds.
Which one of the following statements is correct based on the period 1926-2019?
Long-term government bonds had more volatile annual returns than did the long-term corporate bonds.
Which one of the following statements is a correct reflection of the U.S. financial markets for the period 1926-2019?
U.S. Treasury bills had an annual return in excess of 10 percent in three or more years.
A stock has annual returns of 5 percent, 21 percent, −12 percent, 7 percent, and 6 percent for the past five years. The arithmetic average of these returns is _____ percent while the geometric average return for the period is _____ percent.
5.40; 4.86
A stock had returns of 12.4 percent, 16.6 percent, 10.2 percent, 19.0 percent, −15.7 percent, and 6.3 percent over the last six years. What is the geometric average return on the stock for this period?
7.46%
A stock had returns of 3 percent, 12 percent, 26 percent, −14 percent, and −1 percent for the past five years. Based on these returns, what is the approximate probability that this stock will return at least 20 percent in any one given year?
Approximately 16 percent
Inside information has the least value when financial markets are:
strong form efficient.
A stock had annual returns of 7 percent, −28 percent, 13 percent, and 23 percent for the past four years. The arithmetic average of these returns is _____ percent while the geometric average return for the period is _____ percent.
3.75; 1.72
Which one of the following statements related to capital gains is correct?
An increase in an unrealized capital gain will increase the capital gains yield.
Which one of the following statements related to market efficiency tends to be supported by current evidence?
Markets tend to respond quickly to new information.
