FIN 320 Week 10

If you receive a $2 dividend per share on your 100 shares, your total dividend income is ______.

$2 x 100

Bonds used in Ibbotson SBBI long-term U.S. government bond portfolio had maturities of ______ years.

20

Percentage returns are more convenient than dollar returns because they Blank______.

allow comparison against other investments, apply too other investments

A positive capital gain on a stock results from ______.

an increase in price

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

beginning stock price

The percentage change in the price of a stock over a period of time is called its Blank______.

capital gain yield

The total dollar return is the sum of dividends and Blank______.

capital gains or losses

Which of the following are ways to make money by investing in stocks?

capital gains, dividends

The geometric rate of return takes ______ into account.

compunding

Historically, there is a(n) ______ relationship between risk and expected return in the financial markets.

direct

The total return percentage is the _____ yield plus the capital gains yield.

dividend

Dividends are the ______ component of the total return from investing in a stock.

income

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

In the Ibbotson-Sinquefield studies, U.S. Treasury bill data is based on T-bills with a maturity of ______ month(s).

one

Normally, the excess rate of return is ______.

positive

Historically, the real return on Treasury bills has been ______.

quite low

An unrealized gain is treated the same as a realized gain when computing the total _____

return

The standard deviation is the ______ of the variance.

square root

The variance and its square root, the _______ ________ are the most commonly used measures of volatility.

standard deviation

The geometric average rate of return is approximately equal to Blank______.

the arithmetic mean minus half the variance

True or false: A capital loss is the same thing as a negative capital gain.

true

True or false: The dividend yield = Dt+1/Pt

true

The square of the standard deviation is equal to the ______.

variance