Behavioral Corporate Finance 2nd Edition Shefrin Solutions Manual.pdf

CorporatemFinance,m12em(Ross)
Chapterm10m LessonsmfrommMarketmHistory

1) AlphamIndustriesmstockmsoldmform$39mamsharematmthembeginningmofmthemyear.mDuringmthemyear,m
themcompanympaidmamdividendmofm$3mamsharemandmthenmendedmthemyearmwithmamstockmpricemofm$3
7.mThemchangeminmthemstockmpricemismbestmdescribedmasma:
A) capitalmgain.
B) positivemtotalmdollarmreturn.
C) capitalmloss.
D) negativemtotalmdollarmreturn.
E) negativemdividendmyield.

Answer:m CmDifficul
ty:m1mEasy
Section:m 10.1mReturns
mTopic:m Totalmreturnm

Bloom's:m Remember
AACSB:m ReflectivemThinkingmAccessi
bility:m KeyboardmNavigation

2) Themcapitalmgainsmyieldmplusmthemdividendmyieldmonmamsecuritymismcalledmthe:
A) variancemofmreturns.
B) geometricmreturn.
C) averagemperiodmreturn.
D) currentmyield.
E) totalmreturn.

Answer:m EmDifficul
ty:m1mEasy
Section:m 10.1mReturns
mTopic:m Totalmreturnm

Bloom's:m Remember
AACSB:m ReflectivemThinkingmAccessi
bility:m KeyboardmNavigation




1
Copyrightm©m2019mMcGraw-HillmEducation.mAllmrightsmreserved.
NomreproductionmormdistributionmwithoutmthempriormwrittenmconsentmofmMcGraw-
HillmEducation.

,3) Amportfoliomofmsmall-
companymcommonmstocks,masmusedminmthismcourse,mismbestmdescribedmasmthemstocksmofmthemfirmsm
which:
A) representmthemsmallestmtwentympercentmofmthemcompaniesmlistedmonmthemNYSE.
B) havemgonempublicmwithinmthempastmfivemyears.
C) aremtoomsmallmtombemlistedmonmthemNYSE.
D) aremincludedminmthemS&Pm500mindex.
E) tradempubliclymform$5mamsharemormless.

Answer:m AmDifficu
lty:m1mEasy
Section:m 10.2mHoldingmPeriodmReturnsm
Topic:m Assetmclasses
Bloom's:m Rememberm AACS
B:m ReflectivemThinking
Accessibility:m KeyboardmNavigation

4) Basedmonmthemperiodmofm1926mthroughm2017,m
havemtendedmtomoutperformmothermsecuritiesmovermthemlong-term.
A) U.S.mTreasurymbills
B) large-companym stocks
C) long-termmcorporatembonds
D) small-companym stocks
E) long-termmgovernmentmbonds

Answer:m DmDifficu
lty:m1mEasy
Section:m 10.2mHoldingmPeriodmReturnsm
Topic:m HistoricalmperformancemBloom'
s:m Understand
AACSB:m ReflectivemThinkingmAccessi
bility:m KeyboardmNavigation

5) Basedmonmthemperiodmofm1926mthroughm2017,mU.S.mTreasurymbillsmhavemproducedmannualmrates
mofmreturnmthat:

A) rangedmfromm−1mpercentmtom+15mpercent.
B) rangedmfromm−1mpercentmtom+5mpercent.
C) weremnegativemonlymduringmthemGreatmDepression.
D) havemalwaysmbeenmpositive.
E) nevermexceededm6mpercent.

Answer:m DmDifficu
lty:m1mEasy
Section:m 10.2mHoldingmPeriodmReturnsm
Topic:m HistoricalmperformancemBloom'
s:m Understand
AACSB:m ReflectivemThinking
2
Copyrightm©m2019mMcGraw-HillmEducation.mAllmrightsmreserved.
NomreproductionmormdistributionmwithoutmthempriormwrittenmconsentmofmMcGraw-
HillmEducation.

,Accessibility:m KeyboardmNavigation

6) Anothermtermmthatmrefersmtomthemaveragemratemofmreturnmismthe:
A) variance.
B) standardmdeviation.
C) realmreturn.
D) mean.
E) histogram.

Answer:m DmDifficu
lty:m1mEasy
Section:m 10.3mReturnmStatistics
mTopic:m PortfoliomreturnmBloo

m's:m Remember
AACSB:m ReflectivemThinkingmAccessi
bility:m KeyboardmNavigation

7) Whichmonemofmthemfollowingmtypesmofmsecuritiesmhasmtendedmtomproducemthemlowestmrealmrate
mofmreturnmformthemperiodm1926mthroughm2017?

A) U.S.mTreasurymbills
B) Long-termmgovernmentmbonds
C) Small-companym stocks
D) Large-companym stocks
E) Long-termmcorporatembonds

Answer:m AmDifficu
lty:m1mEasy
Section:m 10.4mAveragemStockmReturnsmandmRisk-
FreemReturnsmTopic:m Historicalmperformance
Bloom's:m Rememberm AACS
B:m ReflectivemThinking
Accessibility:m KeyboardmNavigation




3
Copyrightm©m2019mMcGraw-HillmEducation.mAllmrightsmreserved.
NomreproductionmormdistributionmwithoutmthempriormwrittenmconsentmofmMcGraw-
HillmEducation.

, 8) Onmaverage,mformthemperiodm1926mthroughm2017:
A) themrealmratemofmreturnmonmU.S.mTreasurymbillsmhasmbeenmnegative.
B) small-companymstocksmhavemunderperformedmlarge-companymstocks.
C) long-termmgovernmentmbondsmhavemproducedmhighermreturnsmthanmlong-termmcorporatembonds.
D) themexcessmreturnmonmlong-termmcorporatembondsmhasmexceededmthemexcessmreturnmonmlong-
termmgovernmentmbonds.
E) themexcessmreturnmonmlarge-companymstocksmhasmexceededmthemexcessmreturnmonmsmall-
companymstocks.

Answer:m DmDifficu
lty:m1mEasy
Section:m 10.4mAveragemStockmReturnsmandmRisk-
FreemReturnsmTopic:m Historicalmperformance
Bloom's:m UnderstandmAACS
B:m ReflectivemThinking
Accessibility:m KeyboardmNavigation

9) Overmthemperiodmofm1926mthroughm2017,mthemannualmratemofmreturnmonm
hasmbeenmmoremvolatilemthanmthemannualmratemofmreturnmonm .
A) large-companymstocks;msmall-companymstocks
B) U.S.mTreasurymbills;msmall-companymstocks
C) U.S.mTreasurymbills;mlong-termmgovernmentmbonds
D) long-termmcorporatembonds;msmall-companymstocks
E) large-companymstocks;mlong-termmcorporatembonds

Answer:m EmDifficul
ty:m1mEasy
Section:m 10.4mAveragemStockmReturnsmandmRisk-
FreemReturnsmTopic:m Historicalmperformance
Bloom's:m UnderstandmAACS
B:m ReflectivemThinking
Accessibility:m KeyboardmNavigation




4
Copyrightm©m2019mMcGraw-HillmEducation.mAllmrightsmreserved.
NomreproductionmormdistributionmwithoutmthempriormwrittenmconsentmofmMcGraw-
HillmEducation.