Problem+Set+7

Problem+Set+7 - E120 Principles of Engineering Economics...

Info iconThis preview shows pages 1–3. Sign up to view the full content.

View Full Document Right Arrow Icon
E120 Principles of Engineering Economics Fall 2010 Problem Set #7 1. Suppose a stock had an initial price of $91 per share, paid a dividend of $2.40 per share during the year, and had an ending share price of $102. Compute the percentage total return. 2. You own a portfolio that is 60 percent invested in Stock X, 25 percent in Stock Y, and 15 percent in Stock Z. The expected returns on these three stocks are 9 percent, 17 percent, and 13 percent, respectively. What is the expected return on the portfolio? 3. Based on the following information, calculate the expected return: State of Economy Probability of State of Economy Portfolio Return if State Occurs Recession .20 -.05 Normal .50 .12 Boom .30 .25
Background image of page 1

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon
4. Consider the following information: State of Economy Probability of State of Economy Rate of Return if State Occurs Stock A Stock B Stock C Boom .15 .30 .45 .33 Good .45 .12 .10 .15 Poor .35 .01 -.15 -.05 Bust .05 -.06 -.30 -.09 a. Your portfolio is invested 30 percent each in A and C, and 40 percent in B. What is the
Background image of page 2
Image of page 3
This is the end of the preview. Sign up to access the rest of the document.

This note was uploaded on 11/22/2010 for the course ENGIN 120 taught by Professor Ilan during the Fall '08 term at Berkeley.

Page1 / 3

Problem+Set+7 - E120 Principles of Engineering Economics...

This preview shows document pages 1 - 3. Sign up to view the full document.

View Full Document Right Arrow Icon
Ask a homework question - tutors are online