Page 98 - CAPE Financial Services Syllabus Macmillan_Neat
P. 98
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Items 20-23 refer to the following table on stock return.
Year Stock A Return Stock C
20% Stock B 5%
1 15% -8%
2 13% 14% 11%
3 14% 16% 2%
4 6% 9% 9%
5 22%
2%
20. What is the variance of returns for stock B?
(A) 0.00210
(B) 0.00257
(C) 0.00568
(D) 0.00574
21. What is the standard deviation of returns for stock B?
(A) 0.0112
(B) 0.0215
(C) 0.0568
(D) 0.0754
22. What is the average return for stock A?
(A) 12%
(B) 13.6%
(C) 15.5%
(D) 16%
23. What is the average return of a portfolio that has 40% invested in stock A, 35% invested in
stock B and the remainder invested in stock C?
(A) 7.45%
(B) 8.8%
(C) 10.8%
(D) 12.5%
02169010/SPEC 2016 GO ON TO THE NEXT PAGE
