State Return Probability, Business and Finance questions help

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Stuck on Finance assignment and need Answer to questions…Due by midnight EST

Question #1. 

  1. Paula decides to sell the 500 shares of Microsoft, Inc (MSFT) that she bought 7 years ago for $38.50. If the current price is $41.02, what is her compound (geometric) average return?

Question #2

  1. Rick invested in Buffalo Wild Wings (BWLD) last year when the stock was $171.36. Over the year, the firm did not pay a dividend as all profits were reinvested in the company. The current share price of BWLD is $186.74.

    1. What was Rick’s capital gain yield?

    2. What was Rick’s dividend yield?

Question #3

    1. Assume you have the following three-asset portfolio with the following characteristics:

  • 42 shares of Stock A priced at $48.15 per share and expected return of 25.4%

  • 100 shares of Stock B priced at $20.06 per share and expected return of 19.3%

  • 98 shares of Stock C priced at $11.75 and expected return of 12.6%

  1. What is percentage of your portfolio is invested in Stocks A, B, and C respectively?

  1. 2 What is the expected return E(Rp) of the portfolio?

Question #4

  1. Cameron has a two-asset portfolio with an expected return of 13.80%. The weight of the two stocks is 30% and 70%. The first stock has an expected return of 17%, what is the expected return of the second stock?

Question #5

  1. Craig purchased 150 shares of Box, Inc. (BOX) when it went public for $14 per share. He wants to sell his shares today, 50-days later, for $18.20 and it paid a $2.13 dividend. What is his annualized return?

Question #6

  1. You believe that next year there is a 20% probability of a recession and an 80% probability that the economy will be normal. If your stock will yield -11% in a recession and 22% in a normal year, what is the standard deviation of the stock?

Question #7

  1. Tommie has made an investment that will generate returns that are subject to the state of the economy during the year. Use the following information to calculate the standard deviation of the return distribution for Tommie’s investment.

State

Return

Probability

Weak

0.13

0.3

OK

0.2

0.4

Great

0.25

0.3

Question #8

Genaro needs to capture a return of 40% for his one-year investment in a property. He believes that he can sell the property at the end of the year for $150,000 and that the property will provide him with rental income of $24,000. What is the maximum amount that Genaro should be willing to pay for the property?

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