Question
A stock has an expected return of 12% and a standard deviation of 24%. The other has an expected return of 8% and a standard
A stock has an expected return of 12% and a standard deviation of 24%. The other has an expected return of 8% and a standard deviation of 20%. Tom invested in these stocks equally (50% of his investment went toward each of the stocks). If the two stocks are negatively correlated, which is the most feasible standard deviation of the portfolio?
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The recent dividend was $1.24 per share, and the stock is selling today for $67. The dividend is expected to grow at a rate of 5% per year for the future. If the return is 7% on investments with comparable risk, should you purchase the stock?
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