TABLE 19-4 A Stock Portfolio Has the Following Returns Under the Market

question 313

Multiple Choice

TABLE 19-4
A stock portfolio has the following returns under the market conditions listed below.
-Referring to Table 19-4, what is the return to risk ratio?

• A) 0.64
• B) 1.08
• C) 1.18
• D) 2.00

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Definitions:

Required Return

The minimum profit or yield that an investor expects to receive on an investment, considering the risk involved.

Stock Purchase

The act of acquiring ownership shares in a company, representing a claim on part of its assets and earnings.

Required Return

The minimum expected return an investor demands for an investment, considering its risk and the returns available from other investments.

Dividends

Dividends are payments made by a corporation to its shareholders, usually as a distribution of profits, providing an income stream to investors.