Q1.
(I) Marketable assets can be quickly converted into cash at little cost or risk.
(II) Long-term debt securities are considered to be very liquid.
Q2.
Insurance companies are in the business of selling protection from speculative risk.
Q3.
Compute the AMR (Arithmetic Mean Return) of a portfolio that consists of equal amounts invested in assets yielding returns of 7.2 per cent, 8.9 per cent, 4.5 per cent, and 10.8 per cent respectively.
Q4.
Which of the following risk is wrong in investment analysis?
Q5.
Compute the PPR (Per-Period Return) for an investment that consists of equal amounts invested in assets yielding returns of 6.8 per cent, 9.3 per cent, 4.2 per cent, and 11.6 per cent are in the proportions of .2, .1, .4 and .3.
Q6.
If an investment is purchased for Rs. 100, has paid Rs.1 in dividends, and is now worth Rs. 200. What would this HPRR (Holding Period Return Relative) be?
Q7.
An asset’s per-period return (PPR) is defined as the sum of that period’s income payments and price appreciation minus its beginning-of-period price.
Q8.
(I) Accumulating returns over time and earning a return on the return of prior periods is called compounding.
(II) HPRR is the ratio of the final value divided by the initial value.
Q9.
The range of return is generally measured in terms of the ___________ from the ________ return.
Q10.
All liquid instruments are marketable, but not all marketable investments are liquid.
Q11.
A Rs. 3,000 non-interest-bearing note purchased for Rs.1, 800 and held until maturity, at which time it is paid off at its face value. Compute the HPRR and HPR?
Q12.
12. A long-term bond purchased for Rs. 890 and sold a year later for Rs. 850. The bond pays a coupon of 8 percent on its Rs. 1,000 face value. The first coupon (one-half of the annual rate) is payable in the middle of the one year holding period. Compute the annual return?
Q13.
Compute the GMR for an investment that generated annual returns of 13 per cent, 17 per cent, 2 per cent, 8 per cent, and 10 per cent?
Q14.
Compute the HPRR and HPR of an investment in land purchased for Rs.5,000 and sold for Rs. 7, 000?
Q15.
The holding period return (HPR) relates the profit on an investment directly to its beginning value.
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