Questions from General Investment

Q: A stock sells for $10 per share. You purchase 100

A stock sells for $10 per share. You purchase 100 shares for $10 a share (i.e., for $1,000), and after a year the price rises to $17.50. What will be the percentage return on your investment if you bo...

Q: What is the difference between non diversifiable (systematic) risk and

What is the difference between non diversifiable (systematic) risk and diversifiable (unsystematic) risk?

Q: What is a diversified portfolio? What type of risk is reduced

What is a diversified portfolio? What type of risk is reduced through diversification? How many securities are necessary to achieve this reduction in risk? What characteristics must these securities p...

Q: What are the sources of return on an investment? What are

What are the sources of return on an investment? What are the differences among the expected return, the required return, and the realized return?

Q: If an investor desires diversification, should he or she seek investments

If an investor desires diversification, should he or she seek investments that have a high positive correlation?

Q: How does arbitrage pricing theory advance our understanding of security returns?

How does arbitrage pricing theory advance our understanding of security returns?

Q: Consider the following four investments. a) You invest $

Consider the following four investments. a) You invest $3,000 annually in a mutual fund that earns 10 percent annually, and you reinvest all distributions. How much will you have in the account at the...

Q: You are given the following information concerning several mutual funds:

You are given the following information concerning several mutual funds: During the time period, the Standard & Poor’s stock index exceeded the Treasury bill rate by 10.5 percen...

Q: If an investor buys shares in a no-load mutual fund

If an investor buys shares in a no-load mutual fund for $31.40 and the share appreciate to $44.60 in a year, what would be the percentage return on the investment? If the fund charges an exit fee of 1...

Q: What differentiates a traditional savings account at a commercial bank from a

What differentiates a traditional savings account at a commercial bank from a money market mutual fund? Are investments in money market funds as safe as savings accounts and certificates of deposit wi...