Chapter 01 The Investment Setting
41. |
When comparing returns by decade, the Ibbotson study shows that
small company stocks outperformed large company stocks in every decade since
the 1920s. |
42. |
Those who attempt to engage in short-term market tactics are
termed traders. |
43. |
Research has shown that it is not that difficult to beat the
market on a risk-adjusted basis. |
44. |
Liquidity can be measured by the ability of the investor to
convert an investment into cash within a relatively long period of time, at
its fair book value. |
45. |
Real assets, because of increasing replacement value and
scarcity, tend to perform better than financial assets during periods of high
inflation. |
46. |
One of the problems that investors face in determining required
rates of return is forecasting errors involving interest rates and
inflation. |
47. |
Every investment requires a total return comprised of a real
rate of return, compensation for inflationary expectations, and a risk
premium. |
48. |
Beta measures a security's return relative to the market. |
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Solution: Chapter 01 The Investment Setting