An investor purchased 500 shares of stock A at $22 per share and 1,000 shares of stock B at $30 per share one year ago. Stock A and stock B paid quarterly dividends of $2 per share and $1.50 per share, respectively, during the year. One year later, the investor sold both stocks at $30 per share. Calculate the total return of stock A and stock B and the total return of the portfolio.
Answer to relevant QuestionsIn Practice Problem 37, the correlation coefficient pAB is 0.3 and the standard deviations of stock A and stock B are 20 percent and 15 percent, respectively. Calculate the standard deviation of the portfolio.The expected return of ABC is 18 percent, and the expected return of DEF is 23 percent. Their standard deviations are 12 percent and 20 percent, respectively. If a portfolio is composed of 35 percent ABC and the remainder ...FinCorp Inc. wants to examine a “real” efficient frontier involving Research in Motion (RIM.TO) and the Royal Bank (RY.TO).a. Using monthly data for these two companies from January 2011 to December 2011, graph the ...To achieve a zero standard deviation for a portfolio, calculate the weights of stock A and stock B in Practice Problem 35, assuming the correlation coefficient is−1.Which of the portfolios identified in Practice Problem 18 are undervalued, correctly valued, and overvalued?
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