Reference no: EM132744639

Questions -

QUESTION 1 - Year to date, Company Y had earned a 7 percent return. During the same time period, Company R earned 9.25 percent and Company C earned -2.25 percent. If you have a portfolio made up of 35 percent Y, 40 percent R, and 25 percent C, what is your portfolio return?

1. 4.6667 percent

2. 6.1667 percent

3. 5.5875 percent

4. 12.6625 percent

QUESTION 2 - Rank the following three stocks by their risk-return relationship, best to worst. Rail Haul has an average return of 10 percent and standard deviation of 19 percent. The average return and standard deviation of Idol Staff are 12 percent and 22 percent; and of Poker-R-Us are 11 percent and 25 percent.

1. Idol Staff, Rail Haul, Poker-R-Us

2. Poker-R-Us, Rail Haul, Idol Staff

3. Rail Haul, Idol Staff, Poker-R-Us

4. Idol Staff, Poker-R-Us, Rail Haul

QUESTION 3 - Consider the following correlations:

IBM Apple Disney

IBM 1.0

Apple -2 1

Disney 0.3 -71

Given this data, which of the following is most preferable if an investor can only select one pair of companies?

1. Apple and IBM

2. It does not matter which two are selected-there is no preference order.

3. Disney and IBM

4. Disney and Apple

QUESTION 4 - A stock has an expected return of 15 percent and a standard deviation of 20 percent. Long-term Treasury bonds have an expected return of 9 percent and a standard deviation of 11 percent. Given this data, which of the following statements is correct?

1. Both investments have the same diversifiable risk.

2. The stock investment has a better risk-return trade-off.

3. The bond investment has a better risk-return trade-off.

4. The two assets have the same coefficient of variation.

QUESTION 5 - Which of the following is correct regarding the coefficient of variation?

1. None of the statements are correct.

2. It measures the amount of standard deviation for each one percent of covariance.

3. It measures the amount of risk taken for each one percent of return achieved.

4. It measures the amount of return achieved for each one percent of risk taken.

QUESTION 6 - FedEx Corp. stock ended the previous year at $113.39 per share. It paid a $0.40 per share dividend last year. It ended last year at $126.69. If you owned 300 shares of FedEx, what was your dollar return and percent return?

1. $4,250; 12.29 percent

2. $4,110; 12.08 percent

3. $2,009; 9.13 percent

4. $3,990; 11.73 percent

QUESTION 7 - Mavis invested $10,000 in a mutual fund, which she held for two years. She earned $500 dividends each year and then sold it after two years for $8,000. What was her Holding Period Return in percent? (Round your answer to the nearest percent; do not include the '%').

QUESTION 8 - You are evaluating the balance sheet for Ultra Corporation. From the balance sheet you find the following balances: cash and marketable securities = $10,000, accounts receivable = $2,000, inventory = $20,000, accrued wages and taxes = $1,000, accounts payable = $3,000, and notes payable = $10,000. Calculate Ultra's net working capital.

1. $ 8,000

2. $32,000

3. $28,000

4. $18,000

QUESTION 9 - A preferred stock from DLC pays $3.00 in annual dividends. If the required return on the preferred stock is 9.3 percent, what is the value of the stock?

1. $32.26

2. $38.49

3. $34.89

4. $31.13

QUESTION 10 - Which of these is the term for portfolios with the highest return possible for each risk level?

1. Total portfolios

2. Modern portfolios

3. Optimal portfolios

4. Efficient portfolios