Problem $4$

You have just purchased a share of stock for $$20\mathrm{.}00.$ The company is expected to pay a

dividend of $$0\mathrm{.}50$ per share in exactly one year. If you want to earn a $10\mathrm{.}0\%$ return on

your investment, what price do you need if you expect to sell the share immediately after

it pays the dividend?

Problem $5$

You expect KStreet Co's to trade at $$100$ per share right after paying a $$2\mathrm{.}00$ dividend

per share in one year. What is the most you would pay to buy the stock now if you want

to earn at least a$($n$)15\%$ return?

Problem $6$

The last four years of returns for a stock are as follows:

a$.$ What is the average annual return?

b$.$ What is the variance of the stock's returns?

c$.$ What is the standard deviation of the stock's returns?