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Exam 9: Characterizing Risk and Return

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Question 31

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Which of the following statements is correct regarding total risk?

A) A conglomerate will have more total risk than a firm that has one line of business.
B) All firms have about the same total risk because they are all exposed to the same market risk.
C) Total risk can be quantified by measuring the covariance between the firm and the overall market.
D) None of these choices are correct.

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Question 32

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If you invested $30,000 in Disney and $10,000 in Oracle and the two companies returned 6 percent and 12 percent respectively, what was your portfolio's return?

A) 18.0 percent
B) 10.5 percent
C) 9.0 percent
D) 7.5 percent

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Question 33

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If you own 100 shares of Air Line Inc. at $42.50, 250 shares of BuyRite at $53.25, and 350 shares of MotorCity at $7.75, what are the portfolio weights of each stock?

Year-to-date, Company Y had earned a 7 percent return. During the same time period, Company R earned 9.25 percent and Company C earned -2.25 percent. If you have a portfolio made up of 35 percent Y, 40 percent R, and 25 percent C, what is your portfolio return?

Which of the following is correct?

Which of the following statements is correct?

Compute the standard deviation of Kohl's monthly returns. The past five monthly returns for Kohl's are 5.55 percent, 8.62 percent, -4.44 percent, -1.52 percent, and 9.75 percent.

Which of the following is correct regarding the coefficient of variation?

Which of these is a measure summarizing the overall past performance of an investment?

Which of these is a measure of risk to reward earned by an investment over a specific period of time?

Interest rates, inflation, and economic growth are economic factors that are examples of

We commonly measure the risk-return relationship using which of the following?

MedTech Corp. stock was $50.95 per share at the end of last year. Since then, it paid a $0.45 per share dividend. The stock price is currently $62.50. If you owned 500 shares of MedTech, what was your percent return?

The standard deviation of the past five monthly returns for PG Company are 2.75 percent, -0.75 percent, 4.15 percent, 6.29 percent, and 3.84 percent. What is the standard deviation?

Which of these is the investor's combination of securities that achieves the highest expected return for a given risk level?

The total risk of the S&P 500 Index is equal to

The past five monthly returns for Kohl's are 2.55 percent, -8.62 percent, -14.44 percent, -1.52 percent, and 4.75 percent. What is the average monthly return?

Which of the following makes this a true statement: The shape of the efficient frontier implies that

Which of these is the dollar return characterized as a percentage of money invested?

Determine which one of these three portfolios dominates another. Name the dominated portfolio and the portfolio that dominates it. Portfolio Blue has an expected return of 13 percent and risk of 17 percent. The expected return and risk of portfolio Yellow are 15 percent and 19 percent; and for the Purple portfolio are 12 percent and 18 percent.