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Unformatted text preview: Commerce Mentor Program 298 Midterm Review Package 1. Suppose you bought one share of Pouce Coupe Resorts (PCR) one year ago for $9. Today, you received a dividend payment of $1 and sold the share for $9.50. What was your realized return on PCR over the last year? 2. This morning, the Bank of Dawson Creek (BDC) paid a $2 dividend (it pays dividends once per year) and these are expected to grow at the constant rate of 5% per year. If the required return on BDC is 15%, calculate the current stock price of BDC. 3. One year ago, you purchased a newly issued, 20 year Government of Canada bond that was issued at its par value of $1,000. The coupon rate on this bond is 7% per year and the coupons are paid annually (you received the first coupon this morning). Today, the bond is priced to yield 8% and you have just sold it. What was your return over the past year? 4. Assume the following information about two shares A and B: (a) What is the expected return and standard deviation of returns of a portfolio that consists of...
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- Spring '10
- Standard Deviation, BDC, Pouce Coupe Resorts