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what the steps of this solution? 1) Use the following information about the Company X to answer the questions below: Year Return 1 -10% 5%

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1) Use the following information about the Company X to answer the questions below: Year Return 1 -10% 5% 2 3 4 17% The stock price of Company X was $55 per share at the beginning of year 3 and $50 per share at the end of March of year 3. During that time Company X paid a dividend of $1.3 per share. a) What is the percent return for the first quarter of year 3? How much of it is from capital gain and how much is from dividend yield? b) Assuming that the return in the first quarter of year 3 will happen in the following 3 quarters, what is the annualized return over year 3? c) Use the table above along with your answer from part B and find the arithmetic and geometric average returns over the last four years for Company X d) What is the standard deviation of returns? Solution: a) Quarter return = -6.7%, capital gain is -9.1% and dividend yield is 2.4% b) Annualized return of year 3 = -24.3% c) Arithmetic average = -3.08% and geometric average = -4.36% d) Standard deviation = 18.0%

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