BUSI 420 BUSI 420 Read & Interact Jordan, Miller Jr., & Dolvin Chapter 1 solutions complete answers

BUSI 420 BUSI 420 Read & Interact Jordan, Miller Jr., & Dolvin Chapter 1 solutions complete answers

 

Over the past 96 years, which of the following asset classes has had the highest average return?

 

Over the past 96 years, which of the following asset classes has had the highest standard deviation?

 

True or false: Annualized dividends are the returns on an investment measured in dollars that account for all cash flows and capital gains or losses.

 

Over the past 90 years, which of the following asset classes has had the highest average return?

 

The total percent return is comprised of the:

 

Dividend yield =         return - Capital gains yield

 

The reward for bearing risk is the risk       .

 

Which of the following is the equation for EAR?

 

True or false: Over time, the average return on T-bills is less than 1% higher than the rate of inflation.

 

True or false: From 1900-2005, the U.S. historical equity risk premium was 7.4%.

 

True or false: The Crash of 2008 was limited to the United States.

 

True or false: Any change in a stock's price should not be counted as a capital gain until the stock is sold.

 

Assume an investment has a return of 10%, while Treasury bills earn 2%. The risk premium on this investment is       %.

 

The        period return involves the length of time you own the stock, while the effective annual return is on a per-year basis.

 

Based on both market history and investment surveys, a good estimate for future equity risk premiums is closest to ____%

 

True or false: Standard deviation is the square root of the variance.

 

True or false: During the 2008 Crash, all asset classes had negative returns.

 

True or false: Annualized dividends are the returns on an investment measured in dollars that accounts for all cash flows and capital gains or losses.

 

The _______ essentially measures the average squared difference between the actual returns and the average returns.

 

A symmetric, bell-shaped frequency distribution that is completely defined by its average and standard deviation is called a        distribution.

 

True or false: The geometric average return is always less than or equal to the arithmetic average.

 

True or false: According to Blume's formula, the longer the forecast period, the more weight is applied to the geometric average.

 

True or false: The dollar weighted return is always less than the geometric (time-weighted) average.

 

To calculate the dollar-weighted average return, find the average rate of return that equates the cash        to the cash inflows.

 

Another name for the normal distribution is the        curve. (Enter one word.)

 

The difference between the geometric and arithmetic average is primarily a function of        in returns.

 

If you were forecasting a one year return, Blume's formula would put all of the weight on the _______ average.

 

A risk premium has been said to be comprised of a "wait" component and a        component.

 

If an investor has significant cash flows into and out of an investment, then the most appropriate measure of return is the:

 

_____ is the average compound rate of return earned per year over a multiyear period accounting for investment inflows and outflows.

 

Expected return and risk are:

 

True or false: The arithmetic average and geometric average will be the same when an investment has constant returns each period.