1. Use the following formula to calculate the standard deviation of the portfolio described in the table below. Assume that the correlation between the two assets is 25%.
2. Explain two reasons why you might consider alternative investments as part of a client’s investment portfolio mix? What are some alternative investments you might recommend?
3. The next dividend payment by Halestorm, INC., will be $2.04 per share. The dividends are anticipated to maintain a growth rate of 4.5 percent forever. If the required return of the stock is 9.6 percent per year, what is price of Halestorm’s stock today?