1Business Finance 620Exam 2 Practice Questions30Chapter 11 ReviewHow much should you be willing to pay for a share of stock with a dividend yield of 5.5%, a 13.7% required return, and an expected price one year from today of $40?A.$33.42B.$36.97C. $40.25D. $35.1831
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2Chapter 11 ReviewYou deposit $20,000 into a savings account that earns 6.6% APR, compounded monthly. If inflation averages 3% a year for the next twenty years, and you make no further deposits or withdrawals during this period, how much of the account’s nominal FV at the end of twenty years will be required to cover the cost of inflation?A.$29,435B.$36,122C. $40,569D. $33,29432Chapter 11 ReviewYou own a 15-stock portfolio with a 10% return and 17% standard deviation. Which of the following stocks wouldstandard deviation. Which of the following stocks would be the best addition to your portfolio?A.Stock A, with a 7% return, 21% standard deviation, and (0.65) correlation coefficient with your portfolioB.Stock B, with a 12% return, 15% standard deviation, and 0.78 correlation coefficient with your portfolioCStock C with a 9% return 6% standard deviationC.Stock C, with a 9% return, 6% standard deviation, and (0.36) correlation coefficient with your portfolioD.Stock D, with a 13% return, 12% standard deviation, and 0.63 correlation coefficient with your portfolio33