Test Bank for Principles of Corporate Finance, 14th Edition by Richard Brealey.pdf

CorporateNFinance,N12eN(Ross)
ChapterN10N LessonsNfromNMarketNHistory

1) AlphaNIndustriesNstockNsold NforN$39NaNshareNat NtheNbeginningNof NtheNyear.NDuringNtheNyear,Nt
heNcompanyNpaid NaNdividend Nof N$3NaNshareNand NthenNended NtheNyearNwithNaNstockNpriceNof N$37.
NTheNchangeNinNtheNstockNpriceNisNbest Ndescribed NasNa:

A) capitalNgain.
B) positiveNtotalNdollarNreturn.
C) capitalNloss.
D) negativeNtotalNdollarNreturn.
E) negativeNdividend Nyield.

Answer:N CNDifficul
ty:N1NEasy
Section:N 10.1NReturns
NTopic:N TotalNreturnN

Bloom's:N Remember
AACSB:N ReflectiveNThinkingNAccessi
bility:N Keyboard NNavigation

2) TheNcapitalNgainsNyield NplusNtheNdividend Nyield NonNaNsecurityNisNcalled Nthe:
A) varianceNof Nreturns.
B) geometricNreturn.
C) averageNperiod Nreturn.
D) current Nyield.
E) totalNreturn.

Answer:N ENDifficul
ty:N1NEasy
Section:N 10.1NReturns
NTopic:N TotalNreturnN

Bloom's:N Remember
AACSB:N ReflectiveNThinkingNAccessi
bility:N Keyboard NNavigation




1
Copyright N©N2019 NMcGraw-HillNEducation.NAllNrightsNreserved.
No Nreproduction NorNdistribution Nwithout NtheNpriorNwritten Nconsent Nof NMcGraw-
HillNEducation.

,3) A NportfolioNof Nsmall-
companyNcommonNstocks,NasNused NinNthisNcourse,NisNbest Ndescribed NasNtheNstocksNof NtheNfirmsNw
hich:
A) represent NtheNsmallest NtwentyNpercent Nof NtheNcompaniesNlisted NonNtheNNYSE.
B) haveNgoneNpublicNwithinNtheNpast NfiveNyears.
C) areNtooNsmallNtoNbeNlisted NonNtheNNYSE.
D) areNincluded NinNtheNS&PN500Nindex.
E) tradeNpubliclyNforN$5NaNshareNorNless.

Answer:N ANDifficul
ty:N1NEasy
Section:N 10.2NHoldingNPeriod NReturnsN
Topic:N Asset Nclasses
Bloom's:N RememberN AACS
B:N ReflectiveNThinking
Accessibility:N Keyboard NNavigation

4) Based NonNtheNperiod Nof N1926NthroughN2017,N
haveNtended NtoNoutperformNotherNsecuritiesNoverNtheNlong-term.
A) U.S.NTreasuryNbills
B) large-companyNstocks
C) long-termNcorporateNbonds
D) small-companyNstocks
E) long-termNgovernment Nbonds

Answer:N DNDifficul
ty:N1NEasy
Section:N 10.2NHoldingNPeriod NReturnsN
Topic:N HistoricalNperformanceNBloom'
s:N Understand
AACSB:N ReflectiveNThinkingNAccessi
bility:N Keyboard NNavigation

5) Based NonNtheNperiod NofN1926NthroughN2017,NU.S.NTreasuryNbillsNhaveNproduced NannualNratesN
of NreturnNthat:
A) ranged NfromN−1Npercent NtoN+15Npercent.
B) ranged NfromN−1Npercent NtoN+5Npercent.
C) wereNnegativeNonlyNduringNtheNGreat NDepression.
D) haveNalwaysNbeenNpositive.
E) neverNexceeded N6Npercent.

Answer:N DNDifficul
ty:N1NEasy
Section:N 10.2NHoldingNPeriod NReturnsN
Topic:N HistoricalNperformanceNBloom'
s:N Understand
AACSB:N ReflectiveNThinking
2
Copyright N©N2019 NMcGraw-HillNEducation.NAllNrightsNreserved.
No Nreproduction NorNdistribution Nwithout NtheNpriorNwritten Nconsent Nof NMcGraw-
HillNEducation.

,Accessibility:N Keyboard NNavigation

6) AnotherNtermNthat NrefersNtoNtheNaverageNrateNof NreturnNisNthe:
A) variance.
B) standard Ndeviation.
C) realNreturn.
D) mean.
E) histogram.

Answer:N DNDifficul
ty:N1NEasy
Section:N 10.3NReturnNStatisticsN
Topic:N PortfolioNreturnNBloom'
s:N Remember
AACSB:N ReflectiveNThinkingNAccessi
bility:N Keyboard NNavigation

7) WhichNoneNof NtheNfollowingNtypesNof NsecuritiesNhasNtendedNtoNproduceNtheNlowestNrealNrateN
of NreturnNforNtheNperiod N1926NthroughN2017?
A) U.S.NTreasuryNbills
B) Long-termNgovernment Nbonds
C) Small-companyNstocks
D) Large-companyN stocks
E) Long-termNcorporateNbonds

Answer:N ANDifficul
ty:N1NEasy
Section:N 10.4NAverageNStockNReturnsNand NRisk-
FreeNReturnsNTopic:N HistoricalNperformance
Bloom's:N RememberN AACS
B:N ReflectiveNThinking
Accessibility:N Keyboard NNavigation




3
Copyright N©N2019 NMcGraw-HillNEducation.NAllNrightsNreserved.
No Nreproduction NorNdistribution Nwithout NtheNpriorNwritten Nconsent Nof NMcGraw-
HillNEducation.

, 8) OnNaverage,NforNtheNperiod N1926NthroughN2017:
A) theNrealNrateNof NreturnNonNU.S.NTreasuryNbillsNhasNbeenNnegative.
B) small-companyNstocksNhaveNunderperformed Nlarge-companyNstocks.
C) long-termNgovernment NbondsNhaveNproduced NhigherNreturnsNthanNlong-termNcorporateNbonds.
D) theNexcessNreturnNonNlong-termNcorporateNbondsNhasNexceeded NtheNexcessNreturnNonNlong-
termNgovernment Nbonds.
E) theNexcessNreturnNonNlarge-companyNstocksNhasNexceeded NtheNexcessNreturnNonNsmall-
companyNstocks.

Answer:N DNDifficul
ty:N1NEasy
Section:N 10.4NAverageNStockNReturnsNand NRisk-
FreeNReturnsNTopic:N HistoricalNperformance
Bloom's:N Understand NAACS
B:N ReflectiveNThinking
Accessibility:N Keyboard NNavigation

9) OverNtheNperiod Nof N1926NthroughN2017,NtheNannualNrateNof NreturnNonN
hasNbeenNmoreNvolatileNthanNtheNannualNrateNof NreturnNonN .
A) large-companyNstocks;Nsmall-companyNstocks
B) U.S.NTreasuryNbills;Nsmall-company Nstocks
C) U.S.NTreasuryNbills;Nlong-termNgovernment Nbonds
D) long-termNcorporateNbonds;Nsmall-companyNstocks
E) large-companyNstocks;Nlong-termNcorporateNbonds

Answer:N ENDifficul
ty:N1NEasy
Section:N 10.4NAverageNStockNReturnsNand NRisk-
FreeNReturnsNTopic:N HistoricalNperformance
Bloom's:N Understand NAACS
B:N ReflectiveNThinking
Accessibility:N Keyboard NNavigation




4
Copyright N©N2019 NMcGraw-HillNEducation.NAllNrightsNreserved.
No Nreproduction NorNdistribution Nwithout NtheNpriorNwritten Nconsent Nof NMcGraw-
HillNEducation.