FIN 3403 Exam 3
Which of the following are ways to make money by investing in stocks? - interest - amortization - capital gains - dividends
- capital gains - dividends
The Ibbotson-Sinquefield data show that over the long-term, __________. - small company stocks generated the highest average return - long-term corporate bonds had the lowest risk - small company stocks had the highest risk level - t-bills which had the lowest risk, generated the lowest return
- small company stocks generated the highest average return - small company stocks had the highest risk level - t-bills which had the lowest risk, generated the lowest return
Studying market history can reward us by demonstrating that: - the stock market is nothing but a casino - the greater the potential reward is, the lower the risk - the greater the potential reward is, the greater the risk - on average, investors will earn a reward for bearing risk
- the greater the potential reward is, the greater the risk - on average, investors will earn a reward for bearing risk
Which of the following are needed to describe the distribution? - life span of the stock - the mean return - variety of returns - the standard deviation of returns
- the mean return - the standard deviation of returns
Arrange the following investments from highest to lowest return based on what our study of capital market history has revealed about risk premiums - long-term corporate bonds - small-company common stock - us treasury bill
Small company, long-term, us treasury
Lowest historical risk premium to highest historical risk premium out of: - small-company sticks -long-term corporate bonds - large-company stocks - US treasury bills
US treasury bills, long-term, large, then small
When a company declares a dividend, shareholders generally receive __________. - store credit - promissory notes - cash - interest income
cash
The standard deviation is the _________ of the variance - exponent - square root - inverse - square
square root
