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Stock X ($) Stock Y($) Investment Value 1 January 30 50 31 December 29 56 Dividends received Q1 1 0 Q2 1.2 0 Q3 0
| Stock X ($) | Stock Y($) |
Investment Value |
|
|
1 January | 30 | 50 |
31 December | 29 | 56 |
Dividends received |
|
|
Q1 | 1 | 0 |
Q2 | 1.2 | 0 |
Q3 | 0 | 0 |
Q4 | 2.3 | 2 |
- For both stocks X and Y, calculate the holding period return (over one year) for both stocks.
- If you continue holding these two stocks beyond the first year, which component do you think might not continue to be realised in future (explain)
- Assuming that the two stocks have the same risk, which one would you prefer to own?
- What factors could explain why the return of these two stocks is not in the same form?
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