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I'm having some issues trying to figure a few things out regarding financial management as I prep for my final. *The cash return on an investment is...
I'm having some issues trying to figure a few things out regarding financial management as I prep for my final.
*The cash return on an investment is calculated as purchase price minus selling price.
True
False
*The higher the standard deviation, the more risk the investment has.
True
False
*What is the standard deviation of an investment that has the following expected scenario? 20% probability of a recession, 3.5% return; 65% probability of a moderate economy, 7.0% return; 15% probability of a strong economy, 11.5% return? (show as percent and round to 2 decimal places)
*Tami invested $3,300 in Pizzaclub, Inc. three years ago. She sold the stock today for $5,100. What is her arithmetic average return?
a. 21.57%
b. 27.27%
c. 18.18%
d. 54.55%
e. 11.76%
f. 19.23%
g. 35.29%
*You bought a share of Legal Pride stock today for $80.00. Assume in one year, you sold the stock for $98.00, and collected dividend of $3.00. What would be your cash return on the stock?
a. $18.00
b. $3.00
c. $21.00
d. $101.00
e. $83.00
f. $95.00
g. $98.00
*Which of the following sequences is arranged in the correct order, from highest long-term returns to lowest?
a. International equities, U.S. government bonds, treasury bills
b. Government bonds, emerging market equities, treasury bills
c. Corporate bonds, treasury bills, international equities
d. International equities, U.S. government bonds, U.S. equities
*Amy invested $6,800 in Rockford, Inc. four years ago. She sold the stock today for $10,000. What is her geometric average return?
a. 10.12%
b. 47.06%
c. 13.72%
d. 11.76%
e. 9.64%
f. 8.00%
g. 17.00%