You have had a portfolio made up of three assets. For each of these three assets, pricing data are below: Price at end o

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answerhappygod
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You have had a portfolio made up of three assets. For each of these three assets, pricing data are below: Price at end o

Post by answerhappygod »

You have had a portfolio made up of three assets. For each of
these three assets, pricing data are
below:
Price at end of... Common Stock A Preferred Stock B Coupon Bond
C
Year 0 (purchase) $28 $100 $1,040
Year 1 $30 $100 $1,050
Year 2 $35 $102 $1,040
Year 3 $41 $103 $1,050
Year 4 (now) $44 $105 $1,060
The common stock pays a common dividend of $2 at the end of each
year. The preferred stock
pays a dividend of 5% based upon a face value of $100 at the end of
each year. The bonds have a
coupon rate of 5% and carry a current YTM of 4.5%. You bought 100
shares of Common Stock
A, 50 shares of Preferred Stock B, and 3 Coupon Bonds C, all at the
beginning of the period
(Year 0).
a. What is your total dollar return on portfolio over the entire
period? (15 pts)
b. What is your holding period return on the portfolio over the
entire period? (15 pts)
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