1.What is the discounted payback statistic for a project with yearly cash flows

Question

1.What is the discounted payback statistic for a project with yearly cash flows of -10,000; 2,500; 3,500; 4,000; 2,000 when the company faces a zero percent cost of capital?

a.2.8 years

b.3.56 years

c.3.0 years

d.8.2 years

2.Expected return on a stock comes from two sources:

a.appreciation of the stock price; capital gains

b.appreciation of the stock price; dividend yield

c.dividend yield; dividend growth

d.dividend yield; variable dividend growth

3.The best way to form an efficient portfolio is to

a.equally weight the portfolio

b.choose weights according to market capitalizations of each company

c.weight the stock holdings so that the highest return is expected at each risk level

d.use just four stocks

4.Most bond trades occur between

a.individual investors and the NYSE

b.mutual funds and the U.S. Treasury

d.the NYSE and Goldman Sachs

a.2.8 years

b.3.56 years

c.3.0 years

d.8.2 years

Explanation / Answer

1 c

2.b

3 c

4. c

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