1. The best stock to own when the stock market is at a peak and is expected to d

Question

1. The best stock to own when the stock market is at a peak and is expected to decline in value is one with a beta of

A. +1.5 B. +1.0 C. -1.0 D. -0.5

2. When the Capital Asset Pricing Model is depicted graphically, the result is the

A. standard deviation line. B. coefficient of variation line. C. security market line. D. alpha-beta line.

3. When a company, working with an underwriter, offers the investing public a certain number of shares of its stock at a certain price, the company is marking what is known as a

A. public offering B. rights offering C. stock spin-off D. treasury offering

4. Stock which has been issued and subsequently reacquired by the issuing corporation is called

A. letter stock B. treasury stock C. classified stock D. book stock

5. What is the beta of the risk-free asset?

A. -1.0 B. -0.5 C. 0 D. 1.0

6. The security Market Line relates expected return to

A. standard deviation B. variance C. beta D. there is no relationship of the SML with expected returns

7. An investment will produce an annual cash flow of $4000 for three years. The investor requires a 12% rate of return compounded annually. What is the maximum amount that the investor can pay and still earn the required rate of return?

A. $9,607 B. $10,218 C. $10,714 D. $12.000

8. Most investors are risk-averse, which means they

A. refuse to accept any financial risk. B. invest only in government insured securities. C. require an increase in return for any increase in risk.

D. gain satisfaction from the excitement of risk.

9. The adage "the sooner one receives a return on a given investment, the better," reflects the financial concept known as the

A. time value of money B. total return concept C. historical dividend theory D. expected yield factor

10. Robin purchased a stock at a stock at a price of $18 a share. She received quarterly dividends of $0.5 per share. After one year, Robin sold the stock at a price of $19.50 a share. What is her percentage total return on this investment?

A. 10.3% B. 11.1% C. 17.9% D. 19.4%   

Explanation / Answer

1) B

2) C

3) A

4) B

5) C

6) C

7)

8) B

9) A

Related Questions

Navigate

• Browse (All)
• Browse 1
• Subjects

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.