Question: 13. Use the information in the table below for Stock X to answer the questions that follow. Year 2017 2018 2019 2020 Stock X's return

 13. Use the information in the table below for Stock X

13. Use the information in the table below for Stock X to answer the questions that follow. Year 2017 2018 2019 2020 Stock X's return 45% 15% -30% 0% a.) Compute Stock X's expected return and its standard deviation. (6 points) b.) Compute Stock X's beta assuming the market risk premium is 8% and the risk-free rate is 4%. (3 points) c.) If Stock X has been paying a $4.50 per share dividend every year and expects to do so indefinitely, what should its current stock price be? (3 points) d.) Assume Stock Y has an expected return of 4.8%, a standard deviation of 25%, and a beta of 0.10. Which of the two stocks (Stock X or Stock Y) would an undiversified investor likely select? Explain why. (3 points)

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