TRUE AND FALSE

1. Expected or ex ante return refers to future and anticipated return.
2. Risk was defined as the chance that the actual outcome from an investment will differ from the expected outcome.
3. When an ending value is the result of compounding over time, the geometric mean is needed to describe accurately the true average return over multiple periods.
4. Future value is the value today of a dollar to be received in the future.
5. If a U.S. investor buys foreign stock, his dollar-denominated return will increase if the dollar appreciates relative to the foreign currency.
6. Over multiple periods, the arithmetic mean shows the true average compound rate of growth that actually occurred.
7. Capital gain (loss) is the change in the volume of a security over some period.
8. If the dollar strengthens while the investor holds the foreign asset, after selling the asset, the investor will be able to buy back fewer of the now more-expensive dollars, thereby decreasing the investors dollar-denominated return.
9. The two components of return are yield and price change (capital gain or loss).
10. The geometric mean is always more than the arithmetic mean unless the values being considered are identical.