10 Stocks April 1, 2014 - April 1, 2017 (8.5 points total) In April 2014, an investor purchased $10,000 of each stock shown in Table 1 below. Portfolio Changes April 2017 The investor decides to keep her best performing stock in each industry and sell the rest to generate cash for a real estate investment. Using the information in the Table below, which stock in each industry would you advise this investor to keep? Why? Be sure to discuss both risk and return. Record your answers in the table below. Industry Stock Symbol Beta Coefficient Value of Shares 2017 Required Rate of Return Dividend Yield 2017 Annual Rate of Return 2017 Average Rate of Return (2014- 2017) Variation, CV Life Insurance $14,297.17 1.690 40.0% 14.1% Prudential PRU Life Insurance $11,007.99 1.610 10.3% 3.5% 20.4% 4.0% 3.80 MetLife MET Apparel Stores $8,589.59 0.990 6.7% | 2.9% -10.0% 1 Nordstrom JWN -2.8% -9.04 Apparel Stores $13,549.39 0.660 | 4.8% / 1.4% 1.7% 10.9% TJX Companies TJX Restaurants $12,443.78 0.190 1 2.6% 16.8% 8.3% Dunkin' Brands DNKN Restaurants $20,396.16 Panera PNRA 0.310 2.7% 45.5% 27.4% Discount Stores $9,913.91 0.130 1.7% 3.0% 12.0% 0.2% 63.60 Wal-Mart WMT Discount Stores $9,486.81 0.520 3.9% 3.0% -30.1% 1.5% 20.53 Target TGT Portfolio Value (before stock sale) $99,684.79 0.745 Industry Rationale for keeping this stock and not the other in this industry Company's Stock Symbol PRU or MET? Life Insurance Apparel Stores | JWN or TJX? Restaurants DNKN or PNRA? Discount Stores TGT or WMT? 10 Stocks April 1, 2014 - April 1, 2017 (8.5 points total) In April 2014, an investor purchased $10,000 of each stock shown in Table 1 below. Portfolio Changes April 2017 The investor decides to keep her best performing stock in each industry and sell the rest to generate cash for a real estate investment. Using the information in the Table below, which stock in each industry would you advise this investor to keep? Why? Be sure to discuss both risk and return. Record your answers in the table below. Industry Stock Symbol Beta Coefficient Value of Shares 2017 Required Rate of Return Dividend Yield 2017 Annual Rate of Return 2017 Average Rate of Return (2014- 2017) Variation, CV Life Insurance $14,297.17 1.690 40.0% 14.1% Prudential PRU Life Insurance $11,007.99 1.610 10.3% 3.5% 20.4% 4.0% 3.80 MetLife MET Apparel Stores $8,589.59 0.990 6.7% | 2.9% -10.0% 1 Nordstrom JWN -2.8% -9.04 Apparel Stores $13,549.39 0.660 | 4.8% / 1.4% 1.7% 10.9% TJX Companies TJX Restaurants $12,443.78 0.190 1 2.6% 16.8% 8.3% Dunkin' Brands DNKN Restaurants $20,396.16 Panera PNRA 0.310 2.7% 45.5% 27.4% Discount Stores $9,913.91 0.130 1.7% 3.0% 12.0% 0.2% 63.60 Wal-Mart WMT Discount Stores $9,486.81 0.520 3.9% 3.0% -30.1% 1.5% 20.53 Target TGT Portfolio Value (before stock sale) $99,684.79 0.745 Industry Rationale for keeping this stock and not the other in this industry Company's Stock Symbol PRU or MET? Life Insurance Apparel Stores | JWN or TJX? Restaurants DNKN or PNRA? Discount Stores TGT or WMT