1. Stock X has a standard deviation of 21 percent per year and stock Y has a standard deviation of 6 percent per year. The correlation between stock A and stock B is 0.38. You have a portfolio of these two stocks wherein stock X has a portfolio weight of 60 percent. What is your portfolio standard deviation?
2. The Rug Barn has paid annual dividends of $1.35, $1.36, $1.40, $1.42, and $1.65 over the last 5 years, respectively. What is the geometric average dividend growth rate?
3. Smith Foods just paid an annual dividend of $2.00 a share. Management estimates the dividend will increase by 20 percent a year for the next three years. After that, the annual dividend growth rate is estimated at 5 percent. The required rate of return is 15 percent. What is the value of this stock today?
4. The Marco has current earnings per share of $5.00 and an expected earnings growth rate of 5 percent. The required return on the stock is 14 percent and the current book value per share is $12. What is the current market value of this stock?
5. A stock fund has a standard deviation of 17 percent and a bond fund has a standard deviation of 8 percent. The correlation of the two funds is 0.11. What is the approximate weight of the stock fund in the minimum variance portfolio?

A portfolio consists of the following securities. What is the portfolio weight of stock B?

Stock	# of shares	Price per share
A	200	$50
B	150	$28
C	350	$21

Peter has a portfolio comprised of $8,000 of stock A and $12,000 of stock B. What is the standard deviation of this portfolio?

State	Probability	Stock A	Stock B
Boom	0.80	11%	15%
Normal	0.20	-6%	-19%

What is the standard deviation of the returns on this stock?

State of Economy	Probability	Expected Return
Boom	0.20	24%
Normal	0.60	12%
Recession	0.20	-20%

What is the variance (NOT the standard deviation) of the expected returns on this stock?

State of Economy	Probability	Expected Return
Boom	0.4	15%
Recession	0.6	19%