(b) In the wake of the Amazon Labor Union's historic victory this spring, the first-ever U.S. union election at an Apple retail store is slated for early June. Given this news, the expected growth rate of dividend over the next 13 years will be 11% and reduce to 7% after that. Assume the required rate of return is 10%, estimate the stock price on May 6, 2022. (use the dividend information from (a)) (a) Calculate the expected return and variance for these three stocks and interpret the relationship between stock return and variance. (b) You want to form a portfolio consisting of 100 shares of each of two stocks above, and the stock price for Stock A and B is $60 /share and $80 /share. (i) What is the expected return of your portfolio? (ii) Do you expect the overall risk increase or decrease, and why (you don't need to calculate the portfolio variance). Hint: overall risk=market risk (inherent) + idiosyncratic risk (b) In the wake of the Amazon Labor Union's historic victory this spring, the first-ever U.S. union election at an Apple retail store is slated for early June. Given this news, the expected growth rate of dividend over the next 13 years will be 11% and reduce to 7% after that. Assume the required rate of return is 10%, estimate the stock price on May 6, 2022. (use the dividend information from (a)) (a) Calculate the expected return and variance for these three stocks and interpret the relationship between stock return and variance. (b) You want to form a portfolio consisting of 100 shares of each of two stocks above, and the stock price for Stock A and B is $60 /share and $80 /share. (i) What is the expected return of your portfolio? (ii) Do you expect the overall risk increase or decrease, and why (you don't need to calculate the portfolio variance). Hint: overall risk=market risk (inherent) + idiosyncratic risk