1. If a stock had a beta of 1.5 we would say that
a. it is less volatile than the market
b. it is more volatile than the market
c. It has a higher chance of generating returns
d. it has a lower chance of generating returns
2. True/False. Mutual funds represent a basket of diversified securities
3. True/False IPO’s always occur in the primary market and never in the secondary market
4. True/False For investments in stocks, capital gains are generally taxed while income/dividends are not
5. True/False Money Markets are a proxy for cash
6. Liquidity risk will most likely limit your availability to:
a. Increase returns
b. Obtain cash
c. Diversify your portfolio
7. If interest rates are rising, in general we would say the overall bond market would
a. rise in value
b. existing bonds market value will not be impacted
c. lower in value
d. lower in volatility
8. ETF’s are generally:
a.Passive Investments
b. Active Investments
c. Hybrid Investments
9. If Bond is purchased at a discount, Yield to Maturity [YTM] will be ________ than the coupon [or stated] rate
a. Less
b. Greater
c. equal
Question 1 : Answer b. it is more volatile than the market
Question 2. Mutual funds represent a basket of diversified securities Answer-True
Question 3. IPO’s always occur in the primary market and never in the secondary market. Answer-True
Question 4. For investments in stocks, capital gains are generally taxed while income/dividends are not. Answer-True
Question 5. Money Markets are a proxy for cash. Answer-True
Question 6. Liquidity risk will most likely limit your availability to Answer-b. Obtain cash
Question 7. If interest rates are rising, in general we would say the overall bond market would Answer - c.lower in value
Question 8. ETF’s are generally: Answer - a.Passive Investments
Question 9. If Bond is purchased at a discount, Yield to Maturity [YTM] will be ________ than the coupon [or stated] rate. Answer - a. Less
A stock that has a high beta typically has a. high market or asset price risk. b. zero market or asset price risk. c. low market or asset price risk. d. returns that match those of bonds. e. high yield to maturity. Because stocks have ________ asset price risk or volatility relative to bonds, their long-term average rate of return tends to be _________ relative to bonds. a. greater; higher b. greater; lower c. less; higher d. less; lower e....
Stock X has a 9.5% expected retum, a beta coefficient of 0.8, and a 30% standard deviation of expected returns. Stock Y has a 12.5% expected return, a beta coefficient of 1.2, and a 25% standard deviation. The risk-free rate is 6%, and the market risk premium is 5%. a. Calculate each stock's coefficient of variation. Do not round intermediate calculations. Round your answers to two decimal places. CVx = 3.16 CVy = 2 b. Which stock is riskier for...
1-If the fair value of a stock is greater than its market value, it means that: A. The stock has a low level of risk B. The stock offers a high dividend C. The market is undervaluing the stock. D. The market is overvaluing the stock 2-A profitability index of .85 for a project means that: A-The present value of benefits is 85% greater than the project's costs. B. The project's NPV is greater than zero. C. The project returns...
13. Beta is a measure of a stock's: Systematic Risk Risk relative to the market Both A and B None of the above The most volatile stock would have Beta. Higher than 1.0. Lower than 1.0. Very close to 0.0. Beta is not related to volatility. Discounted cash flow techniques used in valuing common stock are based on: future value analysis. present value analysis. The CAPM. the APT. c.
EVALUATING RISK AND RETURN Stock X has a 9.5% expected return, a beta coefficient of 0.8, and a 40% standard deviation of expected returns. Stock Y has a 12.5% expected return, a beta coefficient of 1.2, and a 20.0% standard deviation. The risk-free rate is 6%, and the market risk premium is 5%. a. Calculate each stock's coefficient of variation. Round your answers to two decimal places. Do not round intermediate calculations. CVx = ________ CVy = ________ b. Which...
Stock X has a 9.5% expected return, - beta coefficient of 0.B, and a 40% standard deviation of expected returns. Stock Y has a 13.0% expected return, a beta coefficient of 1.3, and a 30.0% standard deviation. The risk-free rate is 6%, and the market risk premium is 5%. 2. Calculate each stock's coefficient of variation. Round your answers to two decimal places. Do not round intermediate calculations. CVX = X CV = 2.4 D. Which stock is riskier for...
alk-Through Stock X has a 9.5 % expected return, a beta coefficient of 0.8, and a 30 % standard deviation of expected returns. Stock Y has a 12.5 % expected return, a beta coefficient of 1.2, and a 25% standard deviation. The risk-free rate is 6 %, and the market risk premium is 5%. a. Calculate each stock's coefficient of variation. Do not round intermediate calculations. Round your answers to two decimal places. CV 3.16 CVy 2 b. Which stock...
Stock X has a 10.0% expected return, a beta coefficient of 0.9, and a 35% standard deviation of expected returns. Stock Y has a 13.0% expected return, a beta coefficient of 1.3, and a 30% standard deviation. The risk-free rate is 6%, and the market risk premium is 5%. Calculate each stock's coefficient of variation. Do not round intermediate calculations. Round your answers to two decimal places. CVx = CVy = Which stock is riskier for a diversified investor? For...
Stock X has a 9.5% expected return, a beta coefficient of 0.8, and a 35% standard deviation of expected returns. Stock Y has a 12.0% expected return, a beta coefficient of 1.1, and a 30% standard deviation. The risk-free rate is 6%, and the market risk premium is 5%. Calculate each stock's coefficient of variation. Do not round intermediate calculations. Round your answers to two decimal places. CVx = CVy = Which stock is riskier for a diversified investor? For...
EVALUATING RISK AND RETURN Stock X has a 10.0% expected return, a beta coefficient of 0.9, and a 35% standard deviation of expected returns. Stock Y has a 12.0% expected return, a beta coefficient of 1.1, and a 25.0% standard deviation. The risk-free rate is 6%, and the market risk premium is 5%. a. Calculate each stock's coefficient of variation. Round your answers to two decimal places. Do not round intermediate calculations. CV, - CV- b. Which stock is riskler...