Finance ch 12

Standard deviation is a measure of which one of the following? volatility
Assume that the market prices of the securities that trade in a particular market fairly reflect the available information related to those securities. Which one of the following terms best defines that market? efficient capital market
Which of the following statements is correct in relation to a stock investment? The capital gains yield can be positive, negative, or zero.III. The total return can be positive, negative, or zero.
Which one of the following categories of securities had the highest average return for the period 1926-2010? small company stocks
Which one of the following categories of securities had the lowest average risk premium for the period 1926-2010? U.S. Treasury bills
Which one of the following categories of securities has had the most volatile returns over the period 1926-2010? small-company stocks
Which one of the following statements is correct? The greater the volatility of returns, the greater the risk premium.
To convince investors to accept greater volatility, you must: increase the risk premium
According to theory, studying historical stock price movements to identify mispriced stocks: is ineffective even when the market is only weak form efficient.
The common stock of Air United, Inc., had annual returns of 15.6 percent, 2.4 percent, -11.8 percent, and 32.9 percent over the last four years, respectively. What is the standard deviation of these returns? 19.05 percent

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