Reading 56: Security Market Indices-LOS b 习题精选 2011, following, interpret, security, content

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Session 13: Market Organization, Market Indices, and Market Efficiency
Reading 56: Security Market Indices

LOS b: Calculate and interpret the value, price return, and total return of an index.

 

 

In one year, a security market index has the following quarterly price returns:

First quarter	3%
Second quarter	4%
Third quarter	-2%
Fourth quarter	5%

The price return for the year is closest to:

A) 10.2%.

B) 9.9%.

C) 10.0%

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Return for the year = (1.03)(1.04)(0.98)(1.05) ? 1 = 10.23%.

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The measure of return on a security market index that includes any dividends or interest paid by the securities in the index is known as the:

A) price return.

B) cash flow return.

C) total return.

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The total return on a security market index includes cash flows from the securities (dividends and interest) as well as price changes.