Dogs of the Dow The “Dogs of the Dow” are the stocks listed on the Dow with the highest dividend yield. Exercises 61 and 62 are based on the following table, which shows the top 10 stocks of the “Dogs of the Dow” list for 2015, based on their performance the preceding year. 21 Symbol Company Price ($) Yield T AT&T 33.59 5.48% VZ Verizon 46.78 4.70% CVX Chevron 112.18 3.82% MCD McDonald’s 93.70 3.63% PEE Pfizer 31.15 3.60% GE General 25.27 3.48% MRK Merck 56.79 3.17% CAT Caterpillar 91.53 3.06% XOM ExxonMobil 92.45 2.99% KO Coca-Cola 42.22 2.89% You decide to make a small portfolio consisting of a collection of 5 of the top 10 Dogs of the Dow. a. How many portfolios are possible? b. How many of these portfolios contain VZ and MCD but neither KO nor XOM? c. How many of these portfolios contain at least four stocks with yields above 3.5%?
Dogs of the Dow The “Dogs of the Dow” are the stocks listed on the Dow with the highest dividend yield. Exercises 61 and 62 are based on the following table, which shows the top 10 stocks of the “Dogs of the Dow” list for 2015, based on their performance the preceding year. 21 Symbol Company Price ($) Yield T AT&T 33.59 5.48% VZ Verizon 46.78 4.70% CVX Chevron 112.18 3.82% MCD McDonald’s 93.70 3.63% PEE Pfizer 31.15 3.60% GE General 25.27 3.48% MRK Merck 56.79 3.17% CAT Caterpillar 91.53 3.06% XOM ExxonMobil 92.45 2.99% KO Coca-Cola 42.22 2.89% You decide to make a small portfolio consisting of a collection of 5 of the top 10 Dogs of the Dow. a. How many portfolios are possible? b. How many of these portfolios contain VZ and MCD but neither KO nor XOM? c. How many of these portfolios contain at least four stocks with yields above 3.5%?
Solution Summary: The author calculates the number of portfolios where the portfolio consists of 5 out of the top 10 Dogs of Dow stock.
Dogs of the Dow The “Dogs of the Dow” are the stocks listed on the Dow with the highest dividend yield. Exercises 61 and 62 are based on the following table, which shows the top 10 stocks of the “Dogs of the Dow” list for 2015, based on their performance the preceding year.21
Symbol
Company
Price ($)
Yield
T
AT&T
33.59
5.48%
VZ
Verizon
46.78
4.70%
CVX
Chevron
112.18
3.82%
MCD
McDonald’s
93.70
3.63%
PEE
Pfizer
31.15
3.60%
GE
General
25.27
3.48%
MRK
Merck
56.79
3.17%
CAT
Caterpillar
91.53
3.06%
XOM
ExxonMobil
92.45
2.99%
KO
Coca-Cola
42.22
2.89%
You decide to make a small portfolio consisting of a collection of 5 of the top 10 Dogs of the Dow.
a. How many portfolios are possible?
b. How many of these portfolios contain VZ and MCD but neither KO nor XOM?
c. How many of these portfolios contain at least four stocks with yields above 3.5%?
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