4. What is the lowest stock price I can expect with 99% confidence on a stock that is priced at $80, has an AA return of 13.5%, a standard deviation of 22% that I plan to hold for 6 years?

Calculate the value of a stock that is expected to pay a constant dividend of $1.05per year if the required return is 11%.

After careful analysis, you have determined that a firm’s dividends should grow at 15%, on average, in the foreseeable future. The firm’s last dividend was $1.5. Compute the current price of this stock, assuming the required return is 20%

12. Capital market flows are explained by the diversification of portfolios a. True b. False

Only typed answer  Assume the correlation of returns between KO and the market portfolio equals 0.80, the standard deviation of KO equals 0.60, and the standard deviation for the market portfolio equals 0.30. What is the beta for KO.

True or False: Increasing the number of stocks in a portfolio reduces firm-specific risk. TrueFalseConsider two stock portfolios. Portfolio A consists of 20 different stocks from firms in different industries. Portfolio B consists of four different stocks, also from firms in different industries. The return on Portfolio A is likely to be volatile than that of Portfolio B.Suppose a stock analyst recommends buying stock in the following companies:Company  IndustryToyonda AutomotiveSaalvo AutomotiveGMW AutomotiveHonsubishi AutomotiveShexxon Oil and gasMobron Oil and gasAiring AircraftBoebus AircraftGoohoo TechnologyPherk PharmaceuticalEach of the following portfolios contains four of the stock picks. Which portfolio is the least diversified? Pherk, Airing, Goohoo, ShexxonToyonda, Honsubishi, Boebus, AiringToyonda, Saalvo, GMW, HonsubishiBoebus, Airing, Shexxon, Mobron

7. Even if we can't exactly establish the actual cost of a stock out,  in most cases we can still determine an appropriate level for safety stock.  True False

Q2 - Returns on stocks X and Y are listed below: Period    1    2    3    4    5    6    7Stock X    4%    -2%    5%    -1%    10%    7%    12%Stock Y    -3%    7%    4%    2%    2%    8%    -3% Consider a portfolio of 10% stock X and 90% stock Y. What is the mean of portfolio returns? Please specify your answer in decimal terms and round your answer to the nearest thousandth (e.g., enter 12.3 percent as 0.123).

You observe the E[IBM] = 8%, E[AAPL] = 12%, B(AAPL)=B(IBM)+2/3, Risk-free rate is 4%. What is the expected return on the market portfolio assuming the CAPM is true.

QUESTION 2 Elizabeth has decided to form a portfolio by putting 30% of her money into stock 1 and 70% into stock 2. She assumes that the expected returns will be 10% and 18%, respectively, and that the standard deviations will be 15% and 24%, respectively. ​ ​  Describe what happens to the standard deviation of the portfolio returns when the coefficient of correlation ρ decreases. The standard deviation of the portfolio returns decreases as the coefficient of correlation decreases. The standard deviation of the portfolio returns increases as the coefficient of correlation increases. The standard deviation of the portfolio returns decreases as the coefficient of correlation increases. The standard deviation of the portfolio returns increases as the coefficient of correlation decreases.