CHAPTER 1 QUIZ 53 TO 57

CHAPTER 1 QUIZ 53 TO 57
53. The commitment of current funds in anticipation of receiving a larger future flow of funds is called: 
A. a financial asset.
B. a real asset.
C. an investment.
D. gambling.
E. None of the above
 
54. A(n) _____ is a legally documented claim on an asset, while a(n) _____ is an actual, tangible asset which may be seen, felt, held, or collected. 
A. Real asset; financial asset
B. Financial asset; real asset
C. Indirect equity claim; direct equity claim
D. Direct equity claim; indirect equity claim
E. None of the above
 
 
55. When ranking security returns, the data shows that the annualized returns are as follows (ranked from highest return to lowest return): 
A. Large stocks, small stocks, long-term corporate bonds, long-term government bonds, treasury bills.
B. Small stocks, large stocks, long-term corporate bonds, long-term government bonds, treasury bills.
C. Small stocks, large stocks, treasury bills, long-term government bonds, long-term corporate bonds.
D. Treasury bills, long-term government bonds, long-term corporate bonds, large stocks, small stocks.
E. Large stocks, small stocks, long-term government bonds, long-term corporate bonds, treasury bills.
 
56. When ranking the riskiness of securities using the standard deviation, the highest risk security to the lowest risk security is as follows: 
A. Small stocks, large stocks, long-term government bonds, U.S. treasury bills.
B. Long-term government bonds, small stocks, large stocks, U.S. treasury bills.
C. Large stocks, small stocks, long-term government bonds, U.S. treasury bills.
D. Small stocks, long-term government bonds, large stocks, U.S. treasury bills.
E. U.S. treasury bills, long-term government bonds, large stocks, small stocks.
 
57. Which of the following statements is the most accurate concerning security returns over the eight decades since the 1920s? 
A. Returns on large common stocks were very stable.
B. Returns on long-term corporate bonds were very stable.
C. Returns on long-term government bonds were very stable.
D. Returns on treasury bills were very consistent from period to period.
E. All securities exhibited very unstable returns over the eight decades in question.