文档介绍：CHAPTER 2
RETURN AND RISK BASICS
TRUE/FALSE QUESTIONS
(f) 1 An investor should expect to receive higher returns from taking on lower risks
(f) 2 The two sources of investment returns are dividends and interest1>.
(f) 3 The holding period return (HPR) is equal to the return relative stated as a percentage.
(t) 4 The geometric mean is the nth root of the product of the annual holding period returns for N years minus one.
(f) 5 The geometric mean of a series of returns is always larger than the arithmetic mean and the difference increases with the volatility of the series.
(t) 6 When rates of return are the same for all years,
the geometric mean and the arithmetic mean will be the same.
(f) 7 The expected rate of return is the summation of the possible returns divided by the probability of each return in the summation.
(t) 8 Two measures of risk are the standard deviation and the variance.
(f) 9 The coefficient of variation is the expected return divided by the standard deviation of the return.
(f) 10 Historically return relatives are used to measure the risk for a series of historical rates of return.
(t) 11 Widening interest rate spreads indicate a flight to quality.
(f) 12 The nominal risk-free rate is influenced by the
relative ease or tightness in the capital markets and the unexpected rate of inflation.
(f) 13 The risk premium is a function of sales volatility, financial leverage, and inflation.
MULTIPLE CHOICE QUESTIONS
(b) 1 The return relative is calculated as
a) (1 – HPR)
b) (1 + HPR)
c) (1 – HPR)n
d) (1 + HPR)n
e) (1 –(e + Price Change))
(e) 2 The the variance of returns, everything else remaining constant, the dispersion of expectations and the risk.
a) Smaller, greater, lower
b) Smaller, greater, greater
c) Larger, greater, lower
d) Larger, smaller, higher
e) Larger, greater, higher
(d) 3 The coefficient of variation is a measure of
a) Central tendency.
b) Absolute variability.
c) Absolute dispersi