CHAPTER 12
Some Lessons from Capital Market History
I. DEFINITIONS
RISK PREMIUM
a 1. The excess return required from a risky asset over that required from a risk-free asset
is called the:
a. risk premium. b. geometric premium. c. excess return. d. average return. 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 set 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
CHAPTER 12
ARITHMETIC AVERAGE RETURN
a 6. The return earned in an average year over a multi-year period is called the _____
average return.
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. securities always offer a positive rate of return to investors. d. security prices are guaranteed by the U.S. Securities and Exchange Commission to be
fair.
e. security 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. Laissez-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. semi-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. semi-strong d. weak e. stable
CHAPTER 12
WEAK FORM EFFICIENCY
d 11. The hypothesis that market prices reflect all historical information is called _____
form efficiency.
a. open b. strong c. semi-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 purchase cost, P2 represents the sale proceeds, and d is the dividend income.
a. (P2 – P1) ? (P2 + d) b. (P1 – P2) ? (P2 + d) c. (P1 – P2 – d) ? P1 d. (P2 – P1 + d) ? P1 e. (P2 – P1 + d) ? P2
DIVIDEND YIELD
a 13. The dividend yield is equal to _____, where P1 is the purchase cost, P2 represents the
sale proceeds, and d is the dividend income.
a. d ? P1 b. d ? P1 c. d ? P2 d. d ? P2 e. d ? (P1 + P2)
DIVIDEND YIELD
c 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 decrease. b. the capital gains yield will increase. c. the dividend yield will increase. 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 purchase cost, P2 represents the sale proceeds, and d is the dividend income.
a. P1 – P2 b. P2 – P1 c. P2 ? P1 d. P1 – P2 + d e. P2 – P1 – d
公司理财 习题库 Chap012
