Principles of Corporate Finance- Chapter 7 Exam Questions with Verified Answers (Graded A+)
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Principles of Corporate Finance- Chapter 7
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Principles Of Corporate Finance- Chapter 7
Principles of Corporate Finance- Chapter 7 Exam Questions with Verified Answers (Graded A+)
Which of the following portfolios has the least risk? - Answers A portfolio of Treasury Bills
Which portfolio had the highest average annual return in real terms between 1900 and 2017? - Answers Portfolio ...
Principles of Corporate Finance- Chapter 7 Exam Questions with Verified Answers (Graded A+)
Which of the following portfolios has the least risk? - Answers A portfolio of Treasury Bills
Which portfolio had the highest average annual return in real terms between 1900 and 2017? - Answers
Portfolio of U.S. common stocks
A standard error measures - Answers reliability of an estimate
Which of the following is an estimate of the standard error of the mean? - Answers The standard
deviation of returns divided by the square root of the number of observations
Which portfolio has had the highest average risk premium during the period 1900-2017? - Answers
common stocks
If the standard deviation of annual returns is 19.8 percent and the number of years of observation is
107, what is the standard error? - Answers 1.91 Percent
If the average annual rate of return for common stocks is 11.7 percent, and 4.0 percent for U.S. Treasury
bills, what is the average market risk premium? - Answers 7.7 Percent
Spill Drink Company's stocks had -8 percent, 11 percent, and 24 percent rates of return, respectively,
during the last three years; calculate the (arithmetic) average rate of return for the stock. - Answers 9
Percent per year
For log normally distributed returns, annual compound returns equal - Answers the arithmetic average
return minus half the variance.
Which of the following provides a correct measure of the opportunity cost of capital regardless of the
timing of cash flows? - Answers Arithmetic Average
Assume the following data: Risk-free rate = 4.0 percent; average risk premium = 7.7 percent. Calculate
the required rate of return for the risky asset. - Answers 11.7 Percent
For long-term U.S. government bonds, which risk concerns investors the most? - Answers Interest Rate
Risk
Which of the following countries has had the lowest risk premium? - Answers Denmark
Which of the following countries has had the highest risk premium? - Answers Germany
Mega Corporation has the following returns for the past three years: 7 percent, 13 percent, and 10
percent. Use the following formulas to calculate the variance of the returns and the standard deviation
of the returns: - Answers 6.00 and 2.45 Percent
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