Test Bank For Investment Analysis and Portfolio Management - 11th - 2019 All Chapters - 9781305262997

,Test Bank For Investment Analysis and Portfolio Management 11th Edition
Chapter 1. Appendix.
Exhibit 1A.1
USE THE INFORMATION BELOW FOR THE FOLLOWING PROBLEM(S)

Your expectations from a one-year investment in Wang Computers is as follows:

Probability Rate of Return
.15 −.10
.15 −.20
.35 .00
.25 .15
.10 .15


1. Refer to Exhibit 1A.1. The expected return from this investment is
a. −0.0752.
b. −0.0040.
c. 0.00.
d. 0.0075.
e. 0.4545.
ANSWER: d
POINTS: 1
REFERENCES: 1.APP Computation of Variance and Standard Deviation
QUESTION TYPE: Multiple Choice
HAS VARIABLES: False
PREFACE NAME: Exhibit 1A.1
LEARNING OBJECTIVES: INVE.REIL.19.01.03 - How do investors measure the rate of return on an
investment?
KEYWORDS: Bloom’s: Apply
DATE CREATED: 3/15/2018 7:33 AM
DATE MODIFIED: 3/15/2018 7:39 AM

2. Refer to Exhibit 1A.1. The standard deviation of your expected return from this investment is
a. 0.001.
b. 0.004.
c. 0.124.
d. 1.240.
e. None of these are correct.
ANSWER: c
POINTS: 1
REFERENCES: 1.APP Computation of Variance and Standard Deviation
QUESTION TYPE: Multiple Choice
HAS VARIABLES: False
LEARNING OBJECTIVES: INVE.REIL.19.01.03 - How do investors measure the rate of return on an
investment?
KEYWORDS: Bloom’s: Apply



1

,Test Bank For Investment Analysis and Portfolio Management 11th Edition
Chapter 1. Appendix.
DATE CREATED: 3/15/2018 7:39 AM
DATE MODIFIED: 3/15/2018 7:40 AM

3. Refer to Exhibit 1A.1. The coefficient of variation of this investment is
a. −0.06.
b. −0.65.
c. 6.60.
d. 16.53.
e. 165.10.
ANSWER: d
POINTS: 1
REFERENCES: 1.APP Computation of Variance and Standard Deviation
QUESTION TYPE: Multiple Choice
HAS VARIABLES: False
LEARNING OBJECTIVES: INVE.REIL.19.01.03 - How do investors measure the rate of return on an
investment?
KEYWORDS: Bloom’s: Apply
DATE CREATED: 3/15/2018 7:41 AM
DATE MODIFIED: 3/15/2018 7:41 AM

Exhibit 1A.2
USE THE INFORMATION BELOW FOR THE FOLLOWING PROBLEM(S)

You have an opportunity to invest in project X with the following expected rates of return:

Probability Rate of Return
.25 −.10
.25 .00
.50 .10


4. Refer to Exhibit 1A.2. The expected return for project X is
a. 0.0 percent.
b. 0.5 percent.
c. 2.5 percent.
d. 5.0 percent.
e. 7.5 percent.
ANSWER: c
POINTS: 1
REFERENCES: 1.APP Computation of Variance and Standard Deviation
QUESTION TYPE: Multiple Choice
HAS VARIABLES: False
PREFACE NAME: Exhibit 1A.2
LEARNING OBJECTIVES: INVE.REIL.19.01.03 - How do investors measure the rate of return on an
investment?



2

, Test Bank For Investment Analysis and Portfolio Management 11th Edition
Chapter 1. Appendix.
KEYWORDS: Bloom’s: Apply
DATE CREATED: 3/15/2018 7:42 AM
DATE MODIFIED: 3/15/2018 7:44 AM

5. Refer to Exhibit 1A.2. The standard deviation for project X is
a. −1.581 percent.
b. 0.000 percent.
c. 1.581 percent.
d. 2.738 percent.
e. 5.000 percent.
ANSWER: b
POINTS: 1
REFERENCES: 1.APP Computation of Variance and Standard Deviation
QUESTION TYPE: Multiple Choice
HAS VARIABLES: False
LEARNING OBJECTIVES: INVE.REIL.19.01.03 - How do investors measure the rate of return on an
investment?
KEYWORDS: Bloom’s: Apply
DATE CREATED: 3/15/2018 7:45 AM
DATE MODIFIED: 3/15/2018 7:45 AM

6. An investment has a standard deviation of 12 percent and an expected return of 7 percent. What is the coefficient of
variation for this investment?
a. 1.714
b. 1.372
c. 0.714
d. 0.583
e. 0.500
ANSWER: a
POINTS: 1
REFERENCES: 1.APP Computation of Variance and Standard Deviation
QUESTION TYPE: Multiple Choice
HAS VARIABLES: False
LEARNING OBJECTIVES: INVE.REIL.19.01.03 - How do investors measure the rate of return on an
investment?
KEYWORDS: Bloom’s: Apply
DATE CREATED: 3/15/2018 7:46 AM
DATE MODIFIED: 3/15/2018 7:47 AM




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