FINB4063 Week 1 - On February 1, you bought 100 shares of stock

FINB4063 Week 1 Answer Solution

1). On February 1, you bought 100 shares of stock in the Francesca Corporation for $34 a share and a year later you sold it for $39 a share. During the year, you received a cash dividend of $1.50 a share. Compute your HPR and HPY on this Francesca stock investment.

 2). On august 15, you purchased 100 shares of stock in the Cara Cotton Company at $65 a share and a year later you sold it for $61 a share. During the year, you received dividends of $3 a share. Compute your HPR and HPY on your investment in Cara Cotton.

3). You are considering acquiring shares of common stock in the Madison Beer Corporation. Your rate of return expectations are as follows:

  MADISON BEER CORP.

Possible Rate of Return

Probability

- 0.10

0.30

0.00

0.10

0.10

0.30

0.25

0.30

Compute the expected return [ E (Ri) ] on your investment in Madison Beer.