The correlation coefficient between returns

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1. A portfolio is composed of two stocks, A and B. Stock A has a standard deviation of return of 23% while stock B has a standard deviation of return of 21%. Stock A comprises 50% of the portfolio while stock B comprises 50% of the portfolio. If the variance of return on the portfolio is .0390, the correlation coefficient between the returns on A and B is __________.

0.611

0.626

0.621

0.601

Show all calculation and explanation

2. Sheldon Cooper is analyzing Tesla Inc. Elon Musk gives him following information.? Tesla's dividend this year was? $4.71. Tesla expects? it's dividends to grow forever at constant rate of? 4%. Tesla's cost of capital is? 11%. Tesla is sold at? $57. What recommendation should Sheldon Cooper issue.

A. Insufficient information

B. Sell

C. Buy

D. Cannot determine

3. You find that the annual standard deviation of a stock's returns is equal to 34%. For a 6 year holding period the standard deviation of your total return would equal ________.

83% 63% 50% 93% show calculation

Reference no: EM132062710

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