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##### Saint MBA570 module 5 quiz

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**Question**

Question;9.65%10.00%10.38%12.50%;Question 2.;2.;The effective annual rate (EAR) for a loan with a stated APR of 8% compounded monthly is closest to __________.;(Points: 10);7.72%8.00%8.30%8.66%;Question 3.;3.;If the current inflation rate is 5%, then the nominal rate;necessary for you to earn an 8% real interest rate on your investment is;closest to __________.;(Points: 10);13.0%13.4%4.9%3.0%;Question 4.;4.;Which of the following statements is false?;(Points: 10);The relationship between the investment term and the interest rate is called the term structure of interest rates.Real interest rates indicate the rate at which your money will grow if invested for a certain period.The yield curve provides important information for a business manager.The shape of the yield curve will be strongly influenced by interest rate expectations.;Question 5.;5.;A tax free municipal bond pays an effective annual rate of;7.2%. If your tax rate is 30%, then the effective annual rate that a;comparable corporate bond would have to offer you an equivalent after;tax return would be closest to __________.;(Points: 10);5.0%7.2%9.4%10.3%;Question 6.;6.;A stock's alpha is defined as the stock's;(Points: 10);expected return minus its required return.expected return minus its actual return.nominal return minus its required return.required return minus its actual return.;Question 7.;7.;If investors have relative wealth concerns, they care most about;(Points: 10);the return on their portfolio relative to their overall current wealth.the performance of their portfolio relative to that of their peers.their current portfolio performance relative to their past portfolio performance.the performance of their current wealth relative to their past wealth.;Question 8.;8.;The tendency to hang on to losers and sell winners is known as the;(Points: 10);cascade effect.disposition effect.overconfidence bias.systematic behavior bias.;Question 9.;9.;A stock's __________ measures the stock's return relative to;that predicted based on its beta, at the time of some event.;(Points: 10);excessive abnormal returncumulative average returnexcessive predicted returncumulative abnormal return;Question 10.;10.;ChihuahuaCorporation is expected to pay a $1.5;million dollar dividend every year in perpetuity. It has a cost of;capital of 15%. Assume that the market portfolio is not efficient.;Based on CAPM, Chihuahua has an expected return of 12%. The alpha for;Chihuahua is closest to __________.;(Points: 10);+2%-5%-3%+3%

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