Investments.

May 31st, 2016
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Investments. Week 3. Business. FIN3501. Charles Benson.

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Investments1JKInstructor Charles BensonInvestmentsNovember 1, 2015InvestmentsInvestments21) You are considering three stocks with the following expected dividends yields and gains:Dividend Yield Capital GainA 14% 0%B 8% 6%C 0% 14%A) What is the expected return on each stock?Expected Return = Dividend yield + capital gain yieldA 14%B 14%C 14%B) How may transactions costs and capital gains taxes affect your choices?At the point when the dividends are dispensed, then speculators needs to reinvest the profitinstallments and cause exchange cost. In the vicinity of capital gain impose, the capital gain onthe stock is saddled when stock is sold in the business sector. Subsequently, there is an exchangeof between higher capital gains and profit gains. On the off chance that the profit gains are high,the exchange expense would be high however capital gain assessment would be low and theother way around. On the off chance that the exchange expenses are low, speculator would leantoward stock A. In the event that capital gain expense is low, the financial specialist would favorstock c.2) A portfolio consists of assets with the following expected returns:expected returnreal estate16%weight in portfolio20%Investments3Low quality bonds1510ATT stock1230savings acct540a. What is the expected return on the portfolio?16(0.2) + 15(0.1) + 12(0.3) + 5(0.4) = 3.2+1.5+3.6+2 = 10.3%b. What will be the expected return if the individ

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