A. The _________ measure of returns ignores Compounding
Geometric average
Arithmetic average
IRR
Dollar-weighted
B. The geometric average of -12%, 20%, and 25% is____
8.42%
11%
9.7%
18.88%
C. Your investment has a 20% chance of earning a 30% rate of
return, a 50% chance of earning a 10% rate of return, and a 30%
chance of losing 6%. What is your expected return on this
investment?
12.8%
11%
8.9%
9.2%
D. Your investment has a 40% chance of earning a 15% rate of
return, a 50% chance of earning a 10% rate of return, and a 10%
chance of losing 3%. What is the standard deviation of this
investment?
5.14%
7.59%
8.22%
9.3%
E. Historically, the best asset for the long-term investor wanting
to fend off the threats of inflation and taxes while making his
money grow has been
Bonds
Stocks
Treasury Bills
Money Market Funds
F. The holding-period return on a stock was 25%. Its ending price
was $18, and its beginning price was $16. Its cash dividend must
have been
$.25
2.8%
$4
$2
G. You have the following rates of return for a risky portfolio for
several recent years:
2008 35.23%
2009 18.67%
2010 -9.87%
2011 23.45%
H. The annualized (geometric) average return on this investment
is
16.15%
16.87%
21.32%
15.60%
I. A security with normally distributed returns has an annual
expected return of 18% and standard deviation of 23%. The
probability of getting a return between -28% and 64% in any one
year is
68.26%
95.44%
99.74%
2.5%
