CHAPTER 12
Some Lessons from Capital Market History
I. DEFINITIONS
RISK PREMIUM
a 1. The excess return required from a risky ast over that required from a risk-free ast is called the:
a. risk premium.
b. geometric premium.
肺结核的潜伏期 c. excess return.
d. average return.
誉组词 e. variance.
VARIANCE
b 2. The average squared difference between the actual return and the average return is called the:
a. volatility return.
b. variance.
c. standard deviation.
d. risk premium.
e. excess return.
STANDARD DEVIATION
c 3. The standard deviation for a t of stock returns can be calculated as the:
a. positive square root of the average return.
b. average squared difference between the actual return and the average return.
c. positive square root of the variance.
d. average return divided by N minus one, where N is the number of returns.
e. variance squared.
NORMAL DISTRIBUTION
d 4. A symmetric, bell-shaped frequency distribution that is completely defined by its mean and standard deviation is the _____ distribution.
a. gamma
b. Poisson
c. bi-modal
d. normal
e. uniform
GEOMETRIC AVERAGE RETURN
d 5. The average compound return earned per year over a multi-year period is called the _____ average return.
a. arithmetic
b. standard
c. variant
d. geometric
e. real
ARITHMETIC AVERAGE RETURN
a 6. The return earned in an average year over a multi-year period is called the _____
average return.
怎样看手相 a. arithmetic
b. standard
c. variant
d. geometric
e. real
EFFICIENT CAPITAL MARKET
e 7. An efficient capital market is one in which:
a. brokerage commissions are zero.
b. taxes are irrelevant.
c. curities always offer a positive rate of return to investors.
d. curity prices are guaranteed by the U.S. Securities and Exchange Commission to be fair.
e. curity prices reflect available information.
EFFICIENT MARKETS HYPOTHESIS
a 8. The notion that actual capital markets, such as the NYSE, are fairly priced is called the:
a. Efficient Markets Hypothesis (EMH).
b. Law of One Price.
c. Open Markets Theorem.
d. Laisz-Faire Axiom.
e. Monopoly Pricing Theorem.
STRONG FORM EFFICIENCY
b 9. The hypothesis that market prices reflect all available information of every kind is called _____ form efficiency.
a. open
b. strong
c. mi-strong
d. weak
e. stable
SEMI STRONG FORM EFFICIENCY
c 10. The hypothesis that market prices reflect all publicly-available information is called _____ form efficiency.
a. open
b. strong
c. mi-strong
d. weak
e. stable
WEAK FORM EFFICIENCY
d 11. The hypothesis that market prices reflect all historical information is called _____ form efficiency.
a. open
b. strong
c. mi-strong
d. weak
e. stable
II. CONCEPTS
TOTAL RETURN
d 12. The total percentage return on an equity investment is computed using the formula ______, where P1 is the purcha cost, P2 reprents the sale proceeds, and d is the dividend income.
权宜之计
a. (P2 – P1) undefined (P2 + d)
b. (P1 – P2) undefined (P2 + d)
c. (P1 – P2 – d) undefined P1
d. (P2 – P1 + d) undefined P1
e. (P2 – P1 + d) undefined P2
DIVIDEND YIELD
a 13. The dividend yield is equal to _____, where P1 is the purcha cost, P2 reprents the sale proceeds, and d is the dividend income.
a. d undefined P1
b. d undefined P1
c. d undefined P2
d. d undefined P2
e. d undefined (P1 + P2)
DIVIDEND YIELD
c 湖南征兵14. The Zolo Co. just declared that they are increasing their annual dividend from $
1.00 per share to $1.25 per share. If the stock price remains constant, then:
a. the capital gains yield will decrea.
b. the capital gains yield will increa.
尽管关联词
c. the dividend yield will increa.
d. the dividend yield will also remain constant.
e. neither the capital gains yield nor the dividend yield will change.
CAPITAL GAIN
b 15. The dollar amount of the capital gain on an investment is computed as _____, where P1 is the purcha cost, P安全童谣2 reprents the sale proceeds, and d is the dividend income.
a. P1 – P如何矫正o型腿2
b. P2 – P1
c. P2 undefined P1
d. P1 – P2 + d
e. P2 – P1 – d
TOTAL RETURN
e 16. The capital gains yield plus the dividend yield on a curity is called the:
a. variance of returns.
b. geometric return.
c. average period return.
d. summation of returns.
e. total return.
REAL RETURN
c 17. The real rate of return on a stock is approximately equal to the nominal rate of return:
a. multiplied by (1 + inflation rate).
b. plus the inflation rate.
c. minus the inflation rate.
d. divided by (1 + inflation rate).
e. divided by (1- inflation rate).
