Fundamentals of Investments: Valuation and Management 9th Edition by Bradford Jordan test bank

when either the investment is sold or the investment has been owned for at least one year.
only if the investment is sold and the capital gain is realized.
whenever dividends are paid.
whether or not the investment is sold.
only if the investment incurs a loss in value or is sold.
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
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 18.
Award: 1.00 point
When we refer to the rate of return on an investment, we are generally referring to the:
capital gains yield.
effective annual rate of return.
total percentage return.
dividend yield.
annualized dividend yield.
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
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 19.
Award: 1.00 point
Which one of the following should be used to compare the overall performance of three different
investments?
holding period dollar return
capital gains yield
dividend yield
holding period percentage return
effective annual return
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
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 20.
Award: 1.00 point
If you multiply the number of shares outstanding for a stock by the price per share, you are
computing the firm's:
equity ratio.
total book value.
market share.
market capitalization.
time value.
See Section 1.2
References
Multiple Choice Learning Objective:
01-01 How to
calculate the return
on an investment
using different
methods.
Difficulty: 1 Easy Section: 1.2 The
Historical Record
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 21.
Award: 1.00 point
Which one of the following is considered the best method of comparing the returns on various-sized
investments?
total dollar return
real dollar return
absolute dollar return
percentage return
variance return
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
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 22.
Award: 1.00 point
Which one of the following had the highest average return for the period 1926-2018?
large-company stocks
U.S. Treasury bills
long-term government bonds
small-company stocks
long-term corporate bonds
See Section 1.2
References
Multiple Choice Learning Objective:
01-02 The historical
returns on various
important types of
investments.
Difficulty: 1 Easy Section: 1.2 The
Historical Record
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 23.
Award: 1.00 point
Which one of the following statements is correct based on the historical returns for the period 1926-
2018?
Treasury bills yielded a higher rate of return than long-term government bonds.
The inflation rate exceeded the rate of return on Treasury bills during some years.
Small-company stocks outperformed large-company stocks every year during the period.
Bond prices, in general, were more volatile than stock prices.
Large-company stocks outperformed small-company stocks.
See Section 1.2
References
Multiple Choice Learning Objective:
01-02 The historical
returns on various
important types of
investments.
Difficulty: 1 Easy Section: 1.2 The
Historical Record
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 24.
Award: 1.00 point
For the period 1926-2018, the annual return on large-company stocks:
was negative following every three-year period of positive returns.
was only negative for two or more consecutive years during the Great Depression.
remained negative for at least two consecutive years anytime that it was negative.
never exceeded a positive 30 percent nor lost more than 20 percent.
was unpredictable based on the prior year's performance.
See Section 1.2
References
Multiple Choice Learning Objective:
01-02 The historical
returns on various
important types of
investments.
Difficulty: 2
Medium
Section: 1.2 The
Historical Record
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