1. Suppose a stock had an initial price of $50 per share, paid a dividend of $2.50 per share during the year, and had an ending share price of $55.

1. Compute the percentage total return.
2. What was the dividend yield?
3. What was the capital gains yield?

2. Using the following returns, calculate the arithmetic average returns, the variances, and the standard deviations for X and Y.

1. Calculate the arithmetic average return for both stocks.
2. Calculate the variance and standard deviation.
3. Compare and contrast the standard deviations of the two stocks. What do the numbers tell you? Which stock is riskier based on your calculation?

Year	Return of stock:
	You-Be, Inc.	Zee Corp.
1	12%	25%
2	28%	-34%
3	9%	13%
4	-7%	27%
5	10%	14%

Chapter 13

3. You own a portfolio that has $3,480 invested in Stock A and $7,430 invested in Stock B. If the expected returns on these stocks are 8 percent and 11 percent, respectively, what is the expected return on the portfolio?
4. A stock has a beta of 1.15, the expected return on the market is 10.3 percent, and the risk-free rate is 3.1 percent. What must the expected return on this stock be?