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Standard deviation for a portfolio of common stock

The standard deviation of the rate of return for Jasper products is 6%, while for Headline Industries it is 12%. If the correlation between their returns is 0.74, what is the standard deviation of a portfolio composed of 80% Jasper and 20% Headline common stock?

Subject:

Business

Topic:

Finance

Posting ID:

5623

OTA ID:

103234

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Calculating the standard deviation of a portfolio composed of two assets.

The standard deviation of the rate of return for Lind Distributing is 18% while that for Henry Manufacturing is 22%. If the correlation between their returns is -0.25, what is the standard deviation of a portfolio composed 70% of Lind and 30% of Henry common stock?

Subject:

Business

Topic:

Finance

Posting ID:

5624

OTA ID:

103506

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IPO

a. What is the average underpricing of this sample of IPOs? b. What is the average initial return on my "portfolio" of shares purchased from the four IPOs I bid on? Calculate the average initial return weighting by the amount of money invested in each issue. c. Why have I performed so poorly relative to the average initial return on the full sample of IPOs? What lessons do you draw from my experience?

Subject:

Business

Topic:

Finance

Posting ID:

5955

OTA ID:

101609

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Profit and DOL

A project has fixed costs of $1,000 per year, depreciation charges of $500 a year, revenue of $6,000 a year, and variable costs equal to two-thirds of revenues. a. If sales increase by 5 percent, what will be the increase in pretax profits? b. What is the degree of operating leverage of this project? c. Confirm that the percentage change in profits equals DOL times the percentage change in sales.

Subject:

Business

Topic:

Finance

Posting ID:

5956

OTA ID:

103244

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Finding growth rate

I want to determine the cost of equity captial for a particular company (Nordstrom JWN) using the Dividend Growth Model Approach. I want to use the formula: Re=D1/Po + g. I have found that their last annual dividends were .40 and Po is $20.81 However, I have searched and due to the fact that I really don't know what I am looking for, I need the growth rate to determine D1 and complete the formula. If you could tell me what % to use and where it could be found I would greatly appreciate it.

Subject:

Business

Topic:

Finance

Posting ID:

5983

OTA ID:

103139

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