Chapter 10 Questions

What will the dividend income be on 1,000 shares of XYZ distribution a $.20 per share dividend

$200

If you buy 100 shares of ABC stock at $5 per share, your total investment is _____

$500

If your total dollar return was $7 and your dividend was $2, then the price change on your stock must have been _______

+$5

Suppose you buy a share of stock for $100. At the end of one year the stock price is $114 and a $1 dividend is paid. If you do not sell the stock, your total annual return is ______

15% (1/100) + ((114-100)/100)

The Ibbotson_Sinquefield data showed that over the long-term, ______

Small-company stocks generated the highest average return T-Bills which had the lowest risk, generated the lowest return Small-company stocks had the highest risk level

A capital gain on a stock results from ______

an increase in price

The ______ average is used to find the mean of a frequency distribution

arithmetic

The dividend yield for a one-year period is equal to the annual dividend amount divided by the _________

beginning stock price

Some important characteristics of the normal distribution are that it is ______

bell-shaped symmetrical

The capital gains yield can be found by finding the difference between the ending stock price and the initial stock price and dividing it by the __________

initial stock price

The standard deviation is the _____ of the variance

square root

A frequency distribution of stock return displays _______

the frequency of occurrence for each rate of return range various ranges of returns of the horizontal axis

A frequency distribution of stock returns displays ______

various ranges of returns on the horizontal axis the frequency of occurrence for each rate of return range

The price of a stock drops from $50 to $40 per share. If you own 50 shares, your total capital loss in _____.

$500

What is the arithmetic average return for a mutual fund that reported a return of 5 percent every year for the last 3 years?

5%

The excess rate of return ____

can occasionally be negative is generally positive over the long-term

When a company declares a dividend, shareholders generally receive ______

cash

The two potential way to make money as a stockholder are through _____ and capital appreciation

dividends

A frequency distribution of stock returns displays

the frequency of occurrence for each rate of return rate various ranges of returns on the horizontal axis