Jennerous Ltd pays dividends at the end of each quarter that are constantly growing by 4%...

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Jennerous Ltd pays dividends at the end of each quarter that are constantly growing by 4% p.a. compounded monthly. If the dividend paid exactly three months ago was $(1 + E), where E is in cents, and another dividend has just been paid yesterday, what is the annual effective required rate of return on Jennerous Ltd shares if the share price today is $162? (9 marks) Imagine a minimum variance portfolio comprising investments of 94.59% in BCD and the remainder in CDE. If the covariance between the two assets is 0.0014 and the standard deviation of returns on CDE is 7%, answer the following: i. What is standard deviation of returns on BCD? (8 marks) ii. What is the risk of the portfolio comprising 80% in BCD and 20% in CDE? (4 marks) Jennerous Ltd pays dividends at the end of each quarter that are constantly growing by 4% p.a. compounded monthly. If the dividend paid exactly three months ago was $(1 + E), where E is in cents, and another dividend has just been paid yesterday, what is the annual effective required rate of return on Jennerous Ltd shares if the share price today is $162? (9 marks) Imagine a minimum variance portfolio comprising investments of 94.59% in BCD and the remainder in CDE. If the covariance between the two assets is 0.0014 and the standard deviation of returns on CDE is 7%, answer the following: i. What is standard deviation of returns on BCD? (8 marks) ii. What is the risk of the portfolio comprising 80% in BCD and 20% in CDE? (4 marks)

Answer rating: 100% (QA)

Part 1 Let D be the dividend paid yesterday then the dividend paid three months ago is D1043 The cur... View the full answer