FIN 380 - Exam 3 QUESTIONS WITH
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ANSWERS
The risk-return relationship indicates that higher returns over
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time come with higher risk over time. - CORRECT ANSWERS
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✔✔True
Which of the following lists the series in ascending order (lowest
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first) of volatility over the past 90+ years? - CORRECT ANSWERS
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✔✔Government bonds, large stock, small stocks |\ |\ |\ |\ |\
Which of the following lists the series in ascending order
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(smallest first) of returns over the past 90+ years? - CORRECT
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ANSWERS ✔✔Government bonds, large stock, small stocks |\ |\ |\ |\ |\ |\
Which of the following lists the series in descending order
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(highest first) of returns over the past 90+ years? - CORRECT
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ANSWERS ✔✔Small stocks, large stocks, government bonds|\ |\ |\ |\ |\ |\
Which of the following lists the series in descending order
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(largest first) of volatility over the past 90+ years? - CORRECT
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ANSWERS ✔✔Small stocks, large stocks, government bonds|\ |\ |\ |\ |\ |\
In an historical graph of stock performance, volatility is depicted
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by: - CORRECT ANSWERS ✔✔The ups and downs of the graph
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A stock provides the following returns:
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,Year 1: 6% |\ |\
Year 2: 10% |\ |\
Year 3: -6% |\ |\
What is the geometric average return? - CORRECT ANSWERS
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✔✔3.10%
You purchase a stock for $20. You are able to sell it for $24.88.
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What is your holding period return? - CORRECT ANSWERS
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✔✔24.40%
A stock provides the following returns:
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Year 1: 6% |\ |\
Year 2: 10% |\ |\
Year 3: -8% |\ |\
What is the arithmetic average return? - CORRECT ANSWERS
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✔✔2.67%
Assume that JQH's returns are normally distributed. The expected
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return for JQH is 10% and standard deviation is 5%. What is the
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probability of a return below 15%? - CORRECT ANSWERS ✔✔84%
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Assume that JQH's returns are normally distributed. The expected
|\ |\ |\ |\ |\ |\ |\ |\
return for JQH is 10% and standard deviation is 5%. What is the
|\ |\ |\ |\ |\ |\ |\ |\ |\ |\ |\ |\ |\ |\
probability of JQH stock providing a return above 15%? -
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CORRECT ANSWERS ✔✔16% |\ |\
, Assume that JQH's returns are normally distributed. The expected
|\ |\ |\ |\ |\ |\ |\ |\
return for JQH is 10% and the standard deviation is 5%. What is
|\ |\ |\ |\ |\ |\ |\ |\ |\ |\ |\ |\ |\ |\
the probability of JQH stock providing a return within the range
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15% to 20%? - CORRECT ANSWERS ✔✔13.5%.
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Assume that JQH's returns are normally distributed. The expected
|\ |\ |\ |\ |\ |\ |\ |\
return for JQH is 10% and standard deviation is 5%. What is the
|\ |\ |\ |\ |\ |\ |\ |\ |\ |\ |\ |\ |\ |\
probability of JQH stock providing a return above 20%? -
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CORRECT ANSWERS ✔✔2.5% |\ |\
Assume that JQH's returns are normally distributed. The expected
|\ |\ |\ |\ |\ |\ |\ |\
return for JQH is 10% and standard deviation is 5%. What is the
|\ |\ |\ |\ |\ |\ |\ |\ |\ |\ |\ |\ |\ |\
probability of JQH stock providing a return within 5% - 15%? -
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CORRECT ANSWERS ✔✔68% |\ |\
Returns on JQH, Inc. are forecast to be the following:
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State:
Boom |\
Normal
Bust
Probability:
0.25 |\
0.65
0.10
Return:
30%
15%
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ANSWERS
The risk-return relationship indicates that higher returns over
|\ |\ |\ |\ |\ |\ |\ |\
time come with higher risk over time. - CORRECT ANSWERS
|\ |\ |\ |\ |\ |\ |\ |\ |\ |\
✔✔True
Which of the following lists the series in ascending order (lowest
|\ |\ |\ |\ |\ |\ |\ |\ |\ |\ |\
first) of volatility over the past 90+ years? - CORRECT ANSWERS
|\ |\ |\ |\ |\ |\ |\ |\ |\ |\ |\
✔✔Government bonds, large stock, small stocks |\ |\ |\ |\ |\
Which of the following lists the series in ascending order
|\ |\ |\ |\ |\ |\ |\ |\ |\ |\
(smallest first) of returns over the past 90+ years? - CORRECT
|\ |\ |\ |\ |\ |\ |\ |\ |\ |\ |\
ANSWERS ✔✔Government bonds, large stock, small stocks |\ |\ |\ |\ |\ |\
Which of the following lists the series in descending order
|\ |\ |\ |\ |\ |\ |\ |\ |\ |\
(highest first) of returns over the past 90+ years? - CORRECT
|\ |\ |\ |\ |\ |\ |\ |\ |\ |\ |\
ANSWERS ✔✔Small stocks, large stocks, government bonds|\ |\ |\ |\ |\ |\
Which of the following lists the series in descending order
|\ |\ |\ |\ |\ |\ |\ |\ |\ |\
(largest first) of volatility over the past 90+ years? - CORRECT
|\ |\ |\ |\ |\ |\ |\ |\ |\ |\ |\
ANSWERS ✔✔Small stocks, large stocks, government bonds|\ |\ |\ |\ |\ |\
In an historical graph of stock performance, volatility is depicted
|\ |\ |\ |\ |\ |\ |\ |\ |\ |\
by: - CORRECT ANSWERS ✔✔The ups and downs of the graph
|\ |\ |\ |\ |\ |\ |\ |\ |\ |\
A stock provides the following returns:
|\ |\ |\ |\ |\
,Year 1: 6% |\ |\
Year 2: 10% |\ |\
Year 3: -6% |\ |\
What is the geometric average return? - CORRECT ANSWERS
|\ |\ |\ |\ |\ |\ |\ |\ |\
✔✔3.10%
You purchase a stock for $20. You are able to sell it for $24.88.
|\ |\ |\ |\ |\ |\ |\ |\ |\ |\ |\ |\ |\ |\
What is your holding period return? - CORRECT ANSWERS
|\ |\ |\ |\ |\ |\ |\ |\ |\
✔✔24.40%
A stock provides the following returns:
|\ |\ |\ |\ |\
Year 1: 6% |\ |\
Year 2: 10% |\ |\
Year 3: -8% |\ |\
What is the arithmetic average return? - CORRECT ANSWERS
|\ |\ |\ |\ |\ |\ |\ |\ |\
✔✔2.67%
Assume that JQH's returns are normally distributed. The expected
|\ |\ |\ |\ |\ |\ |\ |\
return for JQH is 10% and standard deviation is 5%. What is the
|\ |\ |\ |\ |\ |\ |\ |\ |\ |\ |\ |\ |\ |\
probability of a return below 15%? - CORRECT ANSWERS ✔✔84%
|\ |\ |\ |\ |\ |\ |\ |\ |\
Assume that JQH's returns are normally distributed. The expected
|\ |\ |\ |\ |\ |\ |\ |\
return for JQH is 10% and standard deviation is 5%. What is the
|\ |\ |\ |\ |\ |\ |\ |\ |\ |\ |\ |\ |\ |\
probability of JQH stock providing a return above 15%? -
|\ |\ |\ |\ |\ |\ |\ |\ |\ |\
CORRECT ANSWERS ✔✔16% |\ |\
, Assume that JQH's returns are normally distributed. The expected
|\ |\ |\ |\ |\ |\ |\ |\
return for JQH is 10% and the standard deviation is 5%. What is
|\ |\ |\ |\ |\ |\ |\ |\ |\ |\ |\ |\ |\ |\
the probability of JQH stock providing a return within the range
|\ |\ |\ |\ |\ |\ |\ |\ |\ |\ |\
15% to 20%? - CORRECT ANSWERS ✔✔13.5%.
|\ |\ |\ |\ |\ |\
Assume that JQH's returns are normally distributed. The expected
|\ |\ |\ |\ |\ |\ |\ |\
return for JQH is 10% and standard deviation is 5%. What is the
|\ |\ |\ |\ |\ |\ |\ |\ |\ |\ |\ |\ |\ |\
probability of JQH stock providing a return above 20%? -
|\ |\ |\ |\ |\ |\ |\ |\ |\ |\
CORRECT ANSWERS ✔✔2.5% |\ |\
Assume that JQH's returns are normally distributed. The expected
|\ |\ |\ |\ |\ |\ |\ |\
return for JQH is 10% and standard deviation is 5%. What is the
|\ |\ |\ |\ |\ |\ |\ |\ |\ |\ |\ |\ |\ |\
probability of JQH stock providing a return within 5% - 15%? -
|\ |\ |\ |\ |\ |\ |\ |\ |\ |\ |\ |\
CORRECT ANSWERS ✔✔68% |\ |\
Returns on JQH, Inc. are forecast to be the following:
|\ |\ |\ |\ |\ |\ |\ |\ |\
State:
Boom |\
Normal
Bust
Probability:
0.25 |\
0.65
0.10
Return:
30%
15%
