CHAPTER 1 QUIZ 78 TO 82

CHAPTER 1 QUIZ 78 TO 82
78. An investment requires a total return that comprises: 
A. a real rate of return and compensation for inflation.
B. a real rate of return, compensation for inflation, and a risk premium.
C. compensation for inflation and a risk premium.
D. a real rate of return, compensation for inflation, a risk premium, and compensation for time and effort devoted to researching alternative investments.
E. None of the above
 
79. An investor in Duke Energy can expect: 
A. low dividends.
B. high dividends.
C. low inflation.
D. fast stock price growth.
E. None of the above
 
80. Because most investors are risk averse, 
A. the riskier the investment, the more the investor will pay for it.
B. the riskier the investment, the less compensation the investor requires.
C. only financial institutions invest in risky assets.
D. they will require a higher rate of return for a riskier investment.
 
81. The two types of investments that provide the highest and lowest yields in the Ibbotson study of Stocks, Bonds, Bills and Inflation are: 
A. large company stocks and U.S. treasury bills.
B. large company stocks and long-term government bonds.
C. small company stocks and U.S. treasury bills.
D. small company stocks and preferred stock.
E. U.S. treasury bills and small company stocks.
 
 
82. Which of the following is not a form of a financial asset? 
A. Commercial paper
B. Commodity futures
C. Warrants
D. Personal residence
E. Money market fund