Historically, the ________ risk an investor is willing to accept, the ________ the potential return for the investment. A) more; lesser B) less; greater C) more; greater D) Historically, the risk/return trade-off has not played out in any particular manner. ANSWER Answer: C
Date: September 19th, 2020
Non-uniform demand can be accommodated in the EOQ model by allowing for non-uniform ordering costs. Indicate whether the statement is true or false ANSWER FALSE
Date: September 19th, 2020
________ may be defined as a measure of uncertainty in a set of potential outcomes for an event in which there is a chance for some loss. A) Diversification B) Risk C) Uncertainty D) Collaboration ANSWER Answer: B
Date: September 19th, 2020
The risk-free rate is 5%, the beta of Stock A is 1.2, the beta of Stock B is 0.8, and the expected return on Stock A is 12.2%. What is the expected return on Stock B? A) 8.4% B) 9.2% C) 9.8% D) 11.0% E) 12.2% ANSWER C
Date: September 19th, 2020
The practice of not putting all of your eggs in one basket is an illustration of ________. A) variance B) diversification C) portion control D) expected return ANSWER Answer: B
Date: September 19th, 2020
Which of the following investments is considered to be default risk-free? A) Currency options B) AAA rated corporate bonds C) Common stock D) Treasury bills ANSWER Answer: D
Date: September 19th, 2020
The expected return on the market is 10%, the risk free rate is 5% and Black Magic Cosmetics Inc. has a beta of -1. What is the expected return for Black Magic Cosmetics Inc.? A) -10% B) -5% C) 0% D) 5% E) 7.5% ANSWER C
Date: September 19th, 2020
You purchased 100 shares of stock for $5 per share. After holding the stock for 8 years and not receiving any dividends, you sell the stock for $42 per share. What are the holding period and annual return on this investment? A) 920%, 41.63% B) 740%, 30.48% C) 625%, 27.66% D) 185%, 14.42% […]
Date: September 19th, 2020
If the last dividend paid by Chemical Brothers Inc. was $1.25 and analysts expect these payments to increase 4% per year, what will the stock price be next year if the required return is 15%? A) $11.82 B) $12.29 C) $31.25 D) $12.78 E) $23.11 ANSWER B
Date: September 19th, 2020
Tom purchased Hampton Industries Inc. stock for $14.65 and sold it 6 months later for $17.38 after receiving a $0.25 dividend. What Tom’s holding period return (HPR), Annual Percentage Rate (APR), and Effective Annual Rate (EAR)? A) 20.34%, 40.68%, 9.70% B) 18.63%, 37.27%, 40.74% C) 17.15%, 34.29%, 37.23% D) 20.34%, 40.68%, 44.82% ANSWER […]
Date: September 19th, 2020
