Title: ANALISA PELABURAN QUESTION 4 a. What is the expected return on a stock that pays a 4 percent annual dividend and whose price is expected to appreciate annually at 6 percent? (3 marks) b. Given the following information C SAGITTARIUS Bid AQUARIUS and Correlation coefficient of returns, L Expected Retur (12) 12% 20% Standard Deviation a 0.10 0.60 1. 100 percent of funds invested in SAGITTARIUS Bd. 2. 100 percent of funds invested in AQUARIUS Bhd. 3. 50 percent of funds invested in each stock 0.20 What are the expected returns and standard deviations of the following portfolios: (3 marks) (3 marks) (5 marks) & What would be the impact if the correlation coefficient were 0.6 instead of 0.27 (3 marks) Your broker recommends that you purchase CAPRICORN Bnd's stock at RM60 aplece The stock pays a RM2.40 dividend which is expected to grow annually at 8 percent. If you want to earn 12 percent on your funds, is this a good buy? (3 marks) TOTAL: 20 MARKS