Fi 312 Chap 1 Hw
A Brief History of Risk and Return
1. For both risk and return, increasing order is b, c, a, d. On average, the higher the risk of an investment, the higher is its expected return.
2. Since the price didn’t change, the capital gains yield was zero. If the total return was four percent, then the dividend yield must be four percent.
3. It is impossible to lose more than –100 percent of your investment. Therefore, return distributions are cut off on the
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