MBA 621- CORPORATE LATEST
FINANCE- EXAM 1
Which of the following investments offered the highest overall return
over the past eighty years?
treasury bills
s&p 500
small stocks
corporate bonds - ANSWERS-small stocks
Which of the following investments offered the largest fluctuations
overall return over the past eighty years?
small stocks
s&p 500
corporate bonds
treasury bills - ANSWERS-small stocks
Suppose you invested $60 in the Ishares Dividend Stock Fund (DVY) a
month ago. It paid a dividend of $0.63 today and then you sold it for
$65. What was your return on the investment? - ANSWERS-9.38%
Supposed you invested $83 in the Ishares High Yeild Fund (HYG) a
month ago. It paid a dividend of $0.53 today and then you sold it for
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PAGE
1
, MBA 621- CORPORATE LATEST
FINANCE- EXAM 1
$94. What was your dividend yield and capital gains yield on the
investment? - ANSWERS-0.57%, 1.08%
Amazon.com stock prices gave a realized return of 5%, -5%, 11%, and -
11% over four successive quarters. What is the annual realized return for
Amazon.com for the year?
A) -1.46%
B) 2.91%
C) 0.00%
D) 1.46% - ANSWERS--1.46%
The S&P 500 index delivered a return of 20%, -10%, 20%, and 5% over
four successive years. What is the arithmetic average annual return for
four years? - ANSWERS-8.75%
Ford Motor Company had realized returns of 20%, 30%, 30%, and 20%
over four quarters. What is the quarterly standard deviation of returns for
Ford calculated from this sample? - ANSWERS-5.77%
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2
, MBA 621- CORPORATE LATEST
FINANCE- EXAM 1
Treasury bill returns are 4%, 3%, 2%, and 5% over four years. The
standard deviation of returns
of Treasury bills is ________.
A) 1.55%
B) 1.03%
C) 0.90%
D) 1.29% - ANSWERS-1.29%
As we add more uncorrelated stocks to a portforlio where the stocks are
held in equal weights, the benefit of diversification is most dramatic -
ANSWERS-at the outset
Diversification reduces the risk of a portfolio because____ and some of
the risks are averaged out of the portfolio - ANSWERS-stocks do not
move identically
The volatility of Home Depot share prices is 20% and that of General
Motors shares is 20%. When I hold both stocks in my portfolio, the
overall volatility of the portfolio is ___. - ANSWERS-not possibile to
calculate as information is inadequate (we need the weights of the two
stocks to calculate the portfolio volatility)
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PAGE
3
FINANCE- EXAM 1
Which of the following investments offered the highest overall return
over the past eighty years?
treasury bills
s&p 500
small stocks
corporate bonds - ANSWERS-small stocks
Which of the following investments offered the largest fluctuations
overall return over the past eighty years?
small stocks
s&p 500
corporate bonds
treasury bills - ANSWERS-small stocks
Suppose you invested $60 in the Ishares Dividend Stock Fund (DVY) a
month ago. It paid a dividend of $0.63 today and then you sold it for
$65. What was your return on the investment? - ANSWERS-9.38%
Supposed you invested $83 in the Ishares High Yeild Fund (HYG) a
month ago. It paid a dividend of $0.53 today and then you sold it for
END OF
PAGE
1
, MBA 621- CORPORATE LATEST
FINANCE- EXAM 1
$94. What was your dividend yield and capital gains yield on the
investment? - ANSWERS-0.57%, 1.08%
Amazon.com stock prices gave a realized return of 5%, -5%, 11%, and -
11% over four successive quarters. What is the annual realized return for
Amazon.com for the year?
A) -1.46%
B) 2.91%
C) 0.00%
D) 1.46% - ANSWERS--1.46%
The S&P 500 index delivered a return of 20%, -10%, 20%, and 5% over
four successive years. What is the arithmetic average annual return for
four years? - ANSWERS-8.75%
Ford Motor Company had realized returns of 20%, 30%, 30%, and 20%
over four quarters. What is the quarterly standard deviation of returns for
Ford calculated from this sample? - ANSWERS-5.77%
END OF
PAGE
2
, MBA 621- CORPORATE LATEST
FINANCE- EXAM 1
Treasury bill returns are 4%, 3%, 2%, and 5% over four years. The
standard deviation of returns
of Treasury bills is ________.
A) 1.55%
B) 1.03%
C) 0.90%
D) 1.29% - ANSWERS-1.29%
As we add more uncorrelated stocks to a portforlio where the stocks are
held in equal weights, the benefit of diversification is most dramatic -
ANSWERS-at the outset
Diversification reduces the risk of a portfolio because____ and some of
the risks are averaged out of the portfolio - ANSWERS-stocks do not
move identically
The volatility of Home Depot share prices is 20% and that of General
Motors shares is 20%. When I hold both stocks in my portfolio, the
overall volatility of the portfolio is ___. - ANSWERS-not possibile to
calculate as information is inadequate (we need the weights of the two
stocks to calculate the portfolio volatility)
END OF
PAGE
3
