# Fight Finance

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Do you think that the following statement is or ? “Buying a single company stock usually provides a safer return than a stock mutual fund.”

Which of the following statements about inflation is NOT correct?

What is the present value of real payments of $100 every year forever, with the first payment in one year? The nominal discount rate is 7% pa and the inflation rate is 4% pa. A stock has a beta of 1.5. The market's expected total return is 10% pa and the risk free rate is 5% pa, both given as effective annual rates. What do you think will be the stock's expected return over the next year, given as an effective annual rate? Which of the below formulas gives the profit $(\pi)$ from being short a call option? Let the underlying asset price at maturity be $S_T$, the exercise price be $X_T$ and the option price be $f_{LC,0}$. Note that $S_T$, $X_T$ and $f_{LC,0}$ are all positive numbers. Mr Blue, Miss Red and Mrs Green are people with different utility functions. Note that a fair gamble is a bet that has an expected value of zero, such as paying$0.50 to win \$1 in a coin flip with heads or nothing if it lands tails. Fairly priced insurance is when the expected present value of the insurance premiums is equal to the expected loss from the disaster that the insurance protects against, such as the cost of rebuilding a home after a catastrophic fire.

Which of the following statements is NOT correct?

Here is a table of stock prices and returns. Which of the statements below the table is NOT correct?

 Price and Return Population Statistics Time Prices LGDR GDR NDR 0 100 1 50 -0.6931 0.5 -0.5 2 100 0.6931 2 1 Arithmetic average 0 1.25 0.25 Arithmetic standard deviation 0.9802 1.0607 1.0607

Which of the following statements is NOT correct? Assume that all events are a surprise and that all other things remain equal. So for example, don't assume that just because a company's dividends and profit rise that its required return will also rise, assume the required return stays the same.

Below is the Australian federal government’s budget balance as a percent of GDP.

From 2009 to 2016 the Australian federal government has implemented:

For a share price to double over 7 years, what must its capital return be as an effective annual rate?