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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.

  1. What is geometric average return for your stock over the four years?
  2. 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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