Common types of debt securities

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1. If the return on stock A in year 1 was 17 %, in year 2 was 7 %, in year 3 was -4 % and in year 4 was -1 %, what was the standard deviation of returns for stock A over this four year period? (Round your answer to 1 decimal place and record without a percent sign. If your final answer is negative, place a minus sign before the number with no space between the sign and the number).

2. The value of any security to the investor is the ____________ of all the _____________ future cash flows from owning the security discounted at the appropriate discount rate, or ____________ rate of return.

3. If the return on stock A in year 1 was -2 %, in year 2 was 4 %, in year 3 was 18 % and in year 4 was 11 %, what was the average annual return for stock A over this four year period?

4. Which of the following are common types of debt securities:

A. Fixed-coupon bonds

B. Zero-coupon bonds

C. Variable-rate bonds

D. Convertible bonds

E. Callable bonds

5. If the risk free rate is 5 %, the expected return on the market portfolio is 12% and the beta of Stock B is 0.7 , what is the required rate of return for Stock B according to the Capital Asset Pricing Model (CAPM)? (Round your answer rounded to one decimal place and record without a percent sign).

Reference no: EM132002899

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