PS1 - Problem Set #1 Business Finance (03075 & 03085)...

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Problem Set #1 Business Finance (03075 & 03085) Please note that you do not have to submit your answers. They will not be graded. But, similar questions will appear in the quiz. Answer keys will be uploaded at Blackboard in the following week. 1. ( Return Measures ) One year ago, Mr. Seth Cohen invested $10,400 in 200 shares of First Industries, Inc., stock and just received a dividend of $600. Today, he sold the 200 shares at $54.25 per share. a. What was his capital gain? b. What was his total dollar return? c. What was his percentage return? d. What was the stock’s dividend yield? [ Hint : dividend yield = per share dividend / per share price] 2. ( Return Statistics ) Mr. Henry can invest in Highbull stock and Slowbear stock. His projection of the returns on these two stocks is as follows: State of Economy Probability of State Occurring Return on Highbull Stock (%) Return on Slowbear Stock (%) Recession 0.25 -2.00 5.00 Normal 0.60 9.20 6.20 Boom 0.15 15.40 7.40 a. Calculate the expected return on each stock. b.
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PS1 - Problem Set #1 Business Finance (03075 & 03085)...

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