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Question 1A: IGM Realty had a price of $32, $32, $37, $35, and $27 at the end of the last five quarters. If IGM pays a dividend of $1 at the end of each quarter, what is the annual realized return on IGM?

A. -5.85%

B. -4.91%

C. -4.68%

D.-5.15%

Question 1B: The geometric average annual return for a large capitalization stock portfolio is 12% for ten years and 6% per year for the next five years. The geometric average annual return for the entire 15-year period is:

A. 9.47%

B. 10.46%

C. 9.96%

D. 10.96%

Question 1C: Consider the following price and dividend data for Ford Motor Company:

Date	Price ($)	Dividend ($)
December 31, 2004	$14.06
January 26, 2005	$13.02	$0.11
April 28, 2005	$9.14	$0.11
July 29, 2005	$10.74	$0.11
October 28, 2005	$8.02	$0.11
December 30, 2005	$7.72

Assume that you purchased Ford Motor Company stock at the closing price on December 31, 2004 and sold it at the closing price on December 30, 2005. Your realized annual return is for the year 2005 is closest to:

A. -42.61%

B. -44.7%

C. -40.5%

D. -38.4%

Question 1D: Consider an economy with two types of firms, S and I. S firms always move together, but I firms move independently of each other. For both types of firms there is a 30% probability that the firm will have a 20% return and a 70% probability that the firm will have a 30% return.

The standard deviation for the return on an portfolio of 20 type S firms is closest to:

A. 13.75%

B. 4.58%

C. -15%

D. 22.91%

Question 1E: Consider an economy with two types of firms, S and I. S firms always move together, but I firms move independently of each other. For both types of firms there is a 60% probability that the firm will have a 20% return and a 40% probability that the firm will have a 30% return.

The standard deviation for the return on a portfolio of 20 type I firms is closest to:

A. 12.25%

B. 24.49%

C.0%

D. 5.48%

Question 1F: Your portfolio consists of 75 shares of CSH and 70 shares of EJH, which you just bought at $21 and $29 per share, respectively. a. What fraction of your portfolio is invested in CSH? In EJH? b. If CSH increases to $23 and EJH decreases to $26, what is the return on your portfolio?

a. What fraction of your portfolio is invested in CSH? In EJH? The fraction invested in CSH is %. (Round to three decimal place.)

The fraction invested in EJH is%. (Round to three decimal place.)

b. If CSH increases to $23 and EJH decreases to $26, what is the return on your portfolio?

The return on the portfolio is %. (Round to three decimal place.)

Question 1G: You have just purchased a share of stock for $19.97. The company is expected to pay a dividend of $0.61 per share in exactly one year. If you want to earn a 10.8% return on your investment, what price do you need if you expect to sell the share immediately after it pays the dividend?

The price one year from now should be $. (Round to the nearest cent.)

Question 1F: You expect K Street Co's trade at $99 per share right after paying a $3.00 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 return of 13%?

The most you would pay to buy the stock is $enter your response here. (Round to the nearest cent.)

Question 1G:

The following table contains prices and dividends for a stock. All prices are after the dividend has been paid. If you bought the stock on January 1 and sold it on December 31, what is your realized return? Hint: Make sure to round all intermediate calculations to at least five decimal places.

	Price	Dividend
Jan 1	9.83
Mar 31	10.83	0.17
Jun 30	10.33	0.17
Sep 30	10.93	0.17
Dec 31	10.83	0.17

Your realized return is %. (Round to one decimal place.)