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Rate of Return

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ch10
Student: ___________________________________________________________________________

1.

The capital gains yield plus the dividend yield on a security is called the:
A. geometric return.
B. average period return.
C. current yield.
D. total return.

2.

The expected return on a security in the market context is:
A. a negative function of execs security risk.
B. a positive function of the beta.
C. a negative function of the beta.
D. a positive function of the excess security risk.
E. independent of beta.

3.

A capital gain occurs when:
A. the selling price is less than the purchase price.
B. the purchase price is less than the selling price.
C. there is no dividend paid.
D. there is no income component of …show more content…

What was the average risk premium earned by long-term Bonds, and small company stocks respectively?
A. 9.5%; 1.8%
B. 4.4; 11.9%
C. 2.16%; 7.37%
D. 1.8%; 13.3%
19. The Alpha stock you bought for $26 3/4 a year ago is now selling for $32 1/2. Alpha also paid you $2.25 in dividends. What would your dollar return be from this stock?
A. $7.75
B. $8.00
C. $8.25
D. $5.75
20. Suppose you own a risky asset with an expected return of 12% and a standard deviation of 20%. If the returns are normally distributed, the approximate probability of receiving a return greater than 32% is: A. .67.
B. .33.
C. .05.
D. .02.
E. .16.
21. Suppose you own a risky asset with an expected return of 12% and a standard deviation of 20%. If the returns are normally distributed, the approximate probability of receiving a return greater than 72%, or less than -48% is:
A. greater than 99%
B. greater than 95%
C. less than 5%
D. less than 1%

22. Last year you bought some Alpha stock for $26 3/4 a share. It is currently selling for $32 1/2. You received a dividend of $2.25 during the year. What is your total rate of return?
A. 30%
B. 21%
C. 8.5%
D. 12%
23. The return pattern on your favorite stock has been 5%, 8%, -12%, 15%, 21% over the last five years.
What has your average return and total change in

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