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principles of corporate finance 14th edition by richard Brealey, stewart myers, franklin allen
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principles of corporate finance 14th edition by richard Brealey, stewart myers, franklin allen
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Solution Manual for Principles of Corporate Finance 14th Edition by Richard Brealey, Stewart Myers, Franklin Allen and Alex Edmans||ISBN NO:10,1265074151||ISBN NO:13,978-1265074159||All Chapters||Comp...
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Solution manual for principles of corporate finance 14thedition by richard Brealey, stewart myers, franklin allen
Which of the following portfolios has the least risk?
A. A portfolio of Treasury bills
B. A portfolio of long-term U.S. government bonds
C. A portfolio of U.S. common stocks of small firms
D. A portfolio of U.S. common stocks of large firms - ANSWER: A. a portfolio of
treasury bills
For long-term U.S. government bonds, which risk concerns investors the most?
A.
Interest rate risk
B.
Default risk
C.
Market risk
D.
Liquidity risk - ANSWER: A. Interest rate risk
What has been the average annual rate of interest on Treasury bills over the past
111 years (1900 to 2011)?
A.
Less than 2%
B.
Between 2% and 3%
C.
Between 3% and 4%
,D.
Greater than 4% - ANSWER: A. less than 2%
What has been the average annual nominal rate of interest on Treasury bills over the
past 111 years?
A.
Less than 1%
B.
Between 1% and 2%
C.
Between 2% and 3%
D.
Greater than 3% - ANSWER: D. greater than 3%
What has been the average nominal rate of return on a portfolio of US common
stocks over the past 111 years (from 1900 to 2011)
A.
Less than 2%
B.
Between 2% and 5%
C.
Between 5% and 11%
D.
Greater than 11% - ANSWER: D. greater than 11%
One dollar invested in a portfolio of long-term US government bonds in 1900 would
have grown in nominal value by the end of year 2011 to:
A.
$719
,B.
$66
C.
$74
D.
$245 - ANSWER: D. $245
One dollar invested in a portfolio of U.S. common stocks in 1900 would have grown
in nominal value by the end of year 2011:
A.
$21,978
B.
$245
C.
$74
D.
$6 - ANSWER: A. $21, 978
What has been the average annual rate of return in real terms for portfolio of US
common stocks between 1900 and 2011?
A.
Less than 2%
B.
Between 2% and 5%
C.
Between 5% and 8%
, D.
Greater than 8% - ANSWER: d. Greater than 8%
Which portfolio has had the lowest average annual nominal rate of return during the
1900-2011 periods?
A.
Portfolio of small U.S. common stocks
B.
Portfolio of U.S. government bonds
C.
Portfolio of Treasury bills
D.
Portfolio of large U.S. common stocks - ANSWER: C. Portfolio of Treasury bills
Which portfolio had the highest average annual return in real terms between 1900
and 2011?
A.
Portfolio of U.S. common stocks
B.
Portfolio of U.S. government bonds
C.
Portfolio of Treasury bills
D.
None of the answers - ANSWER: A. Portfolio of US common stocks
A standard error measures:
A.
nominal annual rate of return on a portfolio
B.
risk of a portfolio
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