1. A portfolio is composed of two stocks, A and B. Stock A has a standard deviation of return of 23% while stock B has a standard deviation of return of 21%. Stock A comprises 50% of the portfolio while stock B comprises 50% of the portfolio. If the variance of return on the portfolio is .0390, the correlation coefficient between the returns on A and B is __________.
0.611
0.626
0.621
0.601
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2. Sheldon Cooper is analyzing Tesla Inc. Elon Musk gives him following information.? Tesla's dividend this year was? $4.71. Tesla expects? it's dividends to grow forever at constant rate of? 4%. Tesla's cost of capital is? 11%. Tesla is sold at? $57. What recommendation should Sheldon Cooper issue.
A. Insufficient information
B. Sell
C. Buy
D. Cannot determine
3. You find that the annual standard deviation of a stock's returns is equal to 34%. For a 6 year holding period the standard deviation of your total return would equal ________.
83% 63% 50% 93% show calculation