(精品)Corporate-Finance---Berk-DeMarzo--Test-Bank-Ch

1Copyright©2014PearsonEducation,Inc.CorporateFinance,3e(Berk/DeMarzo)Chapter10CapitalMarketsandthePricingofRisk10.1RiskandReturn:InsightsfromYearsofInvestorHistory1)Whichofthefollowinginvestmentsofferedthelowestoverallreturnoverthepasteightyyears?A)SmallstocksB)TreasuryBillsC)S&P500D)CorporatebondsAnswer:BDiff:1Section:10.1AFirstLookatRiskandReturnSkill:Definition2)Whichofthefollowinginvestmentsofferedthehighestoverallreturnoverthepasteightyyears?A)TreasuryBillsB)S&P500C)SmallstocksD)CorporatebondsAnswer:CDiff:1Section:10.1AFirstLookatRiskandReturnSkill:Definition3)Whichofthefollowinginvestmentshadthelargestfluctuationsoverallreturnoverthepasteightyyears?A)SmallstocksB)S&P500C)CorporatebondsD)TreasuryBillsAnswer:ADiff:1Section:10.1AFirstLookatRiskandReturnSkill:Definition2Copyright©2014PearsonEducation,Inc.10.2CommonMeasuresofRiskandReturn1)WhichofthefollowingstatementsisFALSE?A)Thevarianceincreaseswiththemagnitudeofthedeviationsfromthemean.B)Thevarianceistheexpectedsquareddeviationfromthemean.C)Twocommonmeasuresoftheriskofaprobabilitydistributionareitsvarianceandstandarddeviation.D)Ifthereturnisrisklessandneverdeviatesfromitsmean,thevarianceisequaltoone.Answer:DExplanation:D)Ifthereturnisrisklessandneverdeviatesfromitsmean,thevarianceisequaltozero.Diff:1Section:10.2CommonMeasuresofRiskandReturnSkill:Conceptual2)WhichofthefollowingstatementsisFALSE?A)Whenaninvestmentisrisky,therearedifferentreturnsitmayearn.B)Infinance,thevarianceofareturnisalsoreferredtoasitsvolatility.C)Theexpectedormeanreturniscalculatedasaweightedaverageofthepossiblereturns,wheretheweightscorrespondtotheprobabilities.D)Thevarianceisameasureofhowspreadoutthedistributionofthereturnis.Answer:BExplanation:B)Infinance,thestandarddeviationofareturnisalsoreferredtoasitsvolatility.Diff:1Section:10.2CommonMeasuresofRiskandReturnSkill:Conceptual3)WhichofthefollowingstatementsisFALSE?A)Thestandarddeviationisthesquarerootofthevariance.B)Becauseinvestorsdislikeonlynegativeresolutionsofuncertainty,alternativemeasuresthatfocussolelyondownsideriskhavebeendeveloped,suchasthesemi-varianceandtheexpectedtailloss.C)Whilethevarianceandthestandarddeviationarethemostcommonmeasuresofrisk,theydonotdifferentiatebetweenupsideanddownsiderisk.D)Whilethevarianceandthestandarddeviationbothmeasurethevariabilityofthereturns,thevarianceiseasiertointerpretbecauseitisinthesameunitsasthereturnsthemselves.Answer:DExplanation:D)Whilethevarianceandthestandarddeviationbothmeasurethevariabilityofthereturns,thestandarddeviationiseasiertointerpretbecauseitisinthesameunitsasthereturnsthemselves.Diff:2Section:10.2CommonMeasuresofRiskandReturnSkill:Conceptual3Copyright©2014PearsonEducation,Inc.4)WhichofthefollowingequationsisINCORRECT?A)Var(R)=B)SD(R)=C)Var(R)=PR×(R-E[R])2D)E[R]=PR×RAnswer:AExplanation:A)SD(R)=Diff:2Section:10.2CommonMeasuresofRiskandReturnSkill:ConceptualUsethetableforthequestion(s)below.ConsiderthefollowingprobabilitydistributionofreturnsforAlphaCorporation:CurrentStockPrice($)StockPriceinOneYear($)ReturnRProbabilityPR$3540%25%$25$250%50%$20-20%25%5)TheexpectedreturnforAlphaCorporationisclosestto:A)6.67%B)5.00%C)10%D)0.00%Answer:BExplanation:B)E[R]=PR×R=.25(40%)+.50(0%)+.25(-20%)=5%Diff:1Section:10.2CommonMeasuresofRiskandReturnSkill:Analytical6)ThevarianceofthereturnonAlphaCorporationisclosestto:A)5.00%B)4.75%C)3.625%D)3.75%Answer:BExplanation:B)E[R]=PR×R=.25(40%)+.50(0%)+.25(-20%)=5%Var(R)=PR×(R-E[R])2=.25(.40-.05)2+.50(.00-.05)2+.25(-20-.05)2=.0475or4.75%Diff:2Section:10.2CommonMeasuresofRiskandReturnSkill:Analytical4Copyright©2014PearsonEducation,Inc.7)ThestandarddeviationofthereturnonAlphaCorporationisclosestto:A)22.4%B)19.0%C)21.8%D)19.4%Answer:CExplanation:C)E[R]=PR×R=.25(40%)+.50(0%)+.25(-20%)=5%Var(R)=PR×(R-E[R])2=.25(.40-.05)2+.50(.00-.05)2+.25(-20-.05)2=.0475or4.75%SD(R)===.2179or21.79%Diff:3Section:10.2CommonMeasuresofRiskandReturnSkill:Analytical8)Supposeaninvestmentisequallylikelytohavea35%returnora-20%return.Theexpectedreturnforthisinvestmentisclosestto:A)7.5%B)15%C)5%D)10%Answer:AExplanation:A)E[R]=PR×R=.50(35%)+.50(-20%)=7.5%Diff:1Section:10.2CommonMeasuresofRiskandReturnSkill:Analytical9)Supposeaninvestmentisequallylikelytohavea35%returnora-20%return.Thevarianceonthereturnforthisinvestmentisclosestto:A).151B).0378C)0D).075Answer:DExplanation:D)E[R]=PR×R=.50(35%)+.50(-20%)=7.5%Var(R)=PR×(R-E[R])2=.50(.35-.075)2+.50(-.20-.075)2=.07563Diff:2Section:10.2CommonMeasuresofRiskandReturnSkill:Analytical5Copyright©2014PearsonEducation,Inc.10)Supposeaninvestmentisequallylikelytohavea35%returnora-20%return.Thestandarddeviationonthereturnforthisinvestmentisclosestto:A)38.9%B)0%C)19.4%D)27.5%Answer:DExplanation:D)E[R]=PR×R=.50(35%)+.50(-20%)=7.5%Var(R)=PR×(R-E[R])2=.50(.35-.075)2+.50(-.20-.075)2=.07563Sdev=.07563(1/2)=.2750Diff:2Section:10.2CommonMeasuresofRiskandReturnSkill:Analytical10.3HistoricalReturnsofStocksandBonds1)WhichofthefollowingstatementsisFALSE?A)Theexpectedreturnisthereturnisthereturnthatactuallyoccursoveraparticulartimeperiod.B)Ifyouholdthestoc