Investment Test Questions
SG-INVESTMENTS
At least 50 percent of exam-1
Will come from this study guide
Chapters 1-4
Student: ___________________________________________________________________________
1. The largest one-day percentage decline in the Dow-Jones Industrial Average during the period 1926-2006 occurred on:
A. October 19, 1987.
B. October 28, 1929.
C. September 17, 2001.
D. November 6, 1929.
E. July 19, 2002. 2. Based on the period 1926-2006, the risk premium for U.S. Treasury bills was:
A. 0.0 percent.
B. 1.2 percent.
C. 2.0 percent.
D. 2.4 percent.
E. 2.7 percent. 3. Which one of the following had the smallest standard deviation of returns for the period 1926-2006?
A. large-company stocks
B. small-company stocks
C. long-term government bonds
D. intermediate-term government bonds
E. long-term corporate bonds 4. Blume's formula is used to:
A. predict future rates of return.
B. convert an arithmetic average return into a geometric average return.
C. convert a geometric average return into an arithmetic average return.
D. measure past performance in a consistent manner.
E. compute the historical mean return over a multi-year period of time. 5. You purchased a stock for $46.70 a share and resold it one year later. Your total return for the year was 11.2 percent and the dividend yield was 2.8 percent. At what price did you resell the stock?
A. $42.78
B. $50.62
C. $51.93
D. $52.08
E. $57.54 6. One year ago, you purchased 400 shares of Southern Cotton at $38.40 a share. During the past year, you received a total of $480 in dividends. Today, you sold your shares for $42.10 a share. What is your total return on this investment?
A. 8.79 percent
B. 9.64 percent
C. 10.98 percent
D. 11.64 percent
E. 12.76 percent 7. Which one of the following should be used to compare the overall performance of three different investments?
A. holding period dollar return
B. capital gains yield
C. dividend yield
D. holding period
At least 50 percent of exam-1
Will come from this study guide
Chapters 1-4
Student: ___________________________________________________________________________
1. The largest one-day percentage decline in the Dow-Jones Industrial Average during the period 1926-2006 occurred on:
A. October 19, 1987.
B. October 28, 1929.
C. September 17, 2001.
D. November 6, 1929.
E. July 19, 2002. 2. Based on the period 1926-2006, the risk premium for U.S. Treasury bills was:
A. 0.0 percent.
B. 1.2 percent.
C. 2.0 percent.
D. 2.4 percent.
E. 2.7 percent. 3. Which one of the following had the smallest standard deviation of returns for the period 1926-2006?
A. large-company stocks
B. small-company stocks
C. long-term government bonds
D. intermediate-term government bonds
E. long-term corporate bonds 4. Blume's formula is used to:
A. predict future rates of return.
B. convert an arithmetic average return into a geometric average return.
C. convert a geometric average return into an arithmetic average return.
D. measure past performance in a consistent manner.
E. compute the historical mean return over a multi-year period of time. 5. You purchased a stock for $46.70 a share and resold it one year later. Your total return for the year was 11.2 percent and the dividend yield was 2.8 percent. At what price did you resell the stock?
A. $42.78
B. $50.62
C. $51.93
D. $52.08
E. $57.54 6. One year ago, you purchased 400 shares of Southern Cotton at $38.40 a share. During the past year, you received a total of $480 in dividends. Today, you sold your shares for $42.10 a share. What is your total return on this investment?
A. 8.79 percent
B. 9.64 percent
C. 10.98 percent
D. 11.64 percent
E. 12.76 percent 7. Which one of the following should be used to compare the overall performance of three different investments?
A. holding period dollar return
B. capital gains yield
C. dividend yield
D. holding period