Fundamentals of Investments: Valuation and Management 9th Edition by Bradford Jordan test bank
Second Lesson
10.
Award: 1.00 point
A frequency distribution, which is completely defined by its average (mean) and variance or
standard deviation, is referred to as a(n):
normal distribution.
variance distribution.
expected rate of return.
average geometric return.
average arithmetic return.
See Section 1.4
References
Multiple Choice Learning Objective:
01-03 The historical
risks on various
important types of
investments.
Difficulty: 1 Easy Section: 1.4 Return
Variability: The
Second Lesson
11.
Award: 1.00 point
The arithmetic average return is the:
summation of the returns for a number of years, t, divided by (t 鈭� 1).
compound total return for a period of years, t, divided by t.
average compound return earned per year over a multi-year period.
average squared return earned in a single year.
return earned in an average year over a multi-year period.
See Section 1.5
References
Multiple Choice Learning Objective:
01-01 How to
calculate the return
on an investment
using different
methods.
Difficulty: 1 Easy Section: 1.5 More on
Average Returns
12.
Award: 1.00 point
The average compound return earned per year over a multi-year period is called the:
total return.
average capital gains yield.
variance.
arithmetic average return.
geometric average return.
See Section 1.5
References
Multiple Choice Learning Objective:
01-01 How to
calculate the return
on an investment
using different
methods.
Difficulty: 1 Easy Section: 1.5 More on
Average Returns
13.
Award: 1.00 point
The average compound return earned per year over a multi-year period when investment inflows
and outflows are considered is called the:
total return.
average capital gains yield.
dollar-weighted average return.
arithmetic average return.
geometric average return.
See Section 1.5
References
Multiple Choice Learning Objective:
01-01 How to
calculate the return
on an investment
using different
methods.
Difficulty: 1 Easy Section: 1.5 More on
Average Returns
14.
Award: 1.00 point
Which one of the following statements is correct concerning the dividend yield and the total return?
The dividend yield can be zero while the total return must be a positive value.
The total return can be negative but the dividend yield cannot be negative.
The total return must be greater than the dividend yield.
The total return plus the capital gains yield is equal to the dividend yield.
The dividend yield exceeds the total return when a stock increases in value.
See Section 1.1
References
Multiple Choice Learning Objective:
01-01 How to
calculate the return
on an investment
using different
methods.
Difficulty: 1 Easy Section: 1.1 Returns
15.
Award: 1.00 point
An annualized return:
is less than a holding period return when the holding period is less than one year.
is expressed as the summation of the capital gains yield and the dividend yield on an
investment.
is expressed as the capital gains yield that would have been realized if an investment had
been held for a twelve-month period.
is computed as (1 + holding period percentage return) m , where “m” is the
number of holding periods in a year.
is computed as (1 + holding period percentage return) m , where “m” is the
number of months in the holding period.
See Section 1.1
References
Multiple Choice Learning Objective:
01-01 How to
calculate the return
on an investment
using different
methods.
Difficulty: 1 Easy Section: 1.1 Returns
16.
Award: 1.00 point
Stacey purchased 300 shares of Coulter Industries stock and held it for 3 months before reselling it.
What is the value of "m" when computing the annualized return on this investment?
.25
.33
.40
3.00
4.00
See Section 1.1 (There are four 3-month periods in a year)
References
Multiple Choice Learning Objective:
01-01 How to
calculate the return
on an investment
using different
methods.
Difficulty: 1 Easy Section: 1.1 Returns
17.
Award: 1.00 point
Capital gains are included in the return on an investment: