Question
Kristi purchased three different stocks at the start of the year, and she has come to you for help with some calculations. She is trying
Kristi purchased three different stocks at the start of the year, and she has come to you for help with some calculations. She is trying to determine which stock has provided the best overall return for her portfolio. The information for the stocks is as follows: (15 points)
| Stock 1 | Stock 2 | Stock 3 |
Stock price @ purchase | $24/share | $32/share | $18/share |
Current stock price | $32/share | $36/share | $24/share |
Number of stocks owned | 150 | 200 | 175 |
Annual dividend Year 1 | $1.25/share | No dividend | $2.00/share |
BETA | 1.25 | 0.95 | 1.45 |
Calculate the annual shareholder return for Stock 1, if Kristi sold all her shares today (4 points)
Calculate the annual shareholder return for Stock 2, if Kristi sold all her shares today (4 points)
Calculate the annual shareholder return for Stock 3, if Kristi sold all her shares today (4 points
Based on the BETA values, which stock is the most volatile and which stock is the least volatile? (2 points)
Which stock has provided Kristi with the greatest return since the date of purchase? (1 point)
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