Question
For four years, you have owned stock in XYZ corp. You bought it in August 2015. The price you paid was $20.00 per share. The
For four years, you have owned stock in XYZ corp. You bought it in August 2015. The price you paid was $20.00 per share. The first year it paid you a dividend of $0.67; the next year, $0.75; the next, $1.00 and then the final year, $1.25. The price for the stock in August of 2016 was $28.00, in August 2017 $24.00, August 2018 $22.00, and finally today it is selling for $31.00.
Date | Close Price | Dividends | Return?? |
Aug 2015 | $20.00 | - | - |
Aug 2016 | $28.00 | $0.67 | 43.35% |
Aug 2017 | $24.00 | $0.75 | 23.75% |
Aug 2018 | $22.00 | $1.00 | 15% |
Aug 2019 | $31.00 | $1.25 | 61.25% |
Use the data above for the first question.
- What is geometric average return for your stock over the four years?
- You own 100 shares of a $10 stock (ABC corp), 200 shares of a $20 stock (DEF corp), and 300 shares of a $30 stock (GHI corp). If you expect returns for each respective stock to be 20% for ABC, 15% for DEF and 10% for GHI, what is the expected return for your portfolio?
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