Questions from Personal Finance


Q: What is meant by the risk-return trade-off?

What is meant by the risk-return trade-off? What is the risk-free rate of return?

See Answer

Q: Briefly describe the two basic sources of return to investors.

Briefly describe the two basic sources of return to investors.

See Answer

Q: What is interest on interest, and why is it such an

What is interest on interest, and why is it such an important element of return?

See Answer

Q: Dwight Fox is a divorced 40-year-old loan officer

Dwight Fox is a divorced 40-year-old loan officer at a large regional bank; he has a 16-year-old son. He has decided to use his annual bonus as a down payment on a new car. One Saturday afternoon Dwig...

See Answer

Q: What is the desired rate of return, and how would it

What is the desired rate of return, and how would it be used to make an investment decision?

See Answer

Q: From a tax perspective, would it make any difference to an

From a tax perspective, would it make any difference to an investor whether the return on a stock took the form of dividends or capital gains? Explain.

See Answer

Q: What’s the difference between a cash dividend and a stock dividend?

What’s the difference between a cash dividend and a stock dividend? Which would you rather receive?

See Answer

Q: Define and briefly discuss each of these common stock measures: (

Define and briefly discuss each of these common stock measures: (a) book value, (b) ROE, (c) EPS, (d) P/E ratio, and (e) beta.

See Answer

Q: Briefly discuss some of the different types of common stock. Which

Briefly discuss some of the different types of common stock. Which types would be most appealing to you, and why?

See Answer

Q: What is a mutual fund? Why are diversification and professional management

What is a mutual fund? Why are diversification and professional management so important to mutual funds?

See Answer