Site MapHelpFeedbackQuiz
Quiz
(See related pages)

1
Total return consists of both an expected and an unexpected return.
A)True
B)False
2
A risk that affects a limited number of securities is known as unsystematic risk.
A)True
B)False
3
The time value of money is measured by the rate of return on the U.S. Treasury bill.
A)True
B)False
4
An unexpected return is most apt to result from which one of these events?
A)A firm's price-earnings ratio was the same as the prior year's ratio.
B)A firm announced its quarterly dividend would continue to be paid.
C)Corporate income taxes rose according to the tax law approved two years ago.
D)A firm increased its annual dividend by the same percentage as in previous years.
E)The earnings of a firm declined due to an industrial accident.
5
Which one of the following is most likely an unsystematic risk?
A)a change in the price of electricity
B)a market shortage of oil
C)the rapid decrease in the rate of GDP growth
D)a labor strike at a retail store
E)an increase in the cost of health insurance
6
The reward for bearing risk depends on _____ risk.
A)unique
B)systematic
C)asset-specific
D)diversifiable
E)company
7
What is the slope of the security market line if the U. S. Treasury bill has a return of 4.5 percent and the market has a return of 12.2 percent?
A)5.45 percent
B)6.00 percent
C)7.28 percent
D)7.70 percent
E)7.85 percent
8
Jensen and Sons common stock has an expected return of 14.8 percent. The risk-free rate is 2.8 percent and the market risk premium is 6.4 percent. What is the beta on Jensen and Sons stock?
A)1.408
B)1.750
C)1.875
D)1.932
E)1.985
9
You would like to invest $40,000 in a stock with a beta of 1.68. How much would you need to invest in U.S. Treasury bills to create a portfolio containing these two securities if you want the portfolio beta equal to the market beta?
A)$24,800
B)$27,200
C)$57,900
D)$64,800
E)$67,200
10
A security which is overvalued will lie _____ and a security which is correctly valued will lie _____.
A)above the security market line (SML); on the horizontal axis
B)above the SML; on the SML
C)below the SML; on the horizontal axis
D)below the SML; on the SML
E)to the right of the SML; to the left of the SML





To learn more about the book this website supports, please visit its Information Center.
(c)2009 McGraw-Hill Higher Education
Any use is subject to the Terms of Use and Privacy Notice.
McGraw-Hill Higher Education is one of the many fine businesses of The McGraw-Hill Companies.


Jordan: Fund of Investments 5eOnline Learning Center

Home > Chapter 12 > Quiz