Question

The "Dogs of the Dow" are the stocks listed on the Dow with the highest dividend yield. The following table shows the top 10 stocks of the "Dogs of the Dow" list for 2015, based on their performance the preceding year. Symbol Company Price ($) AT&T 33.59 5.48% VZ Verizon 46.78 4.70% CVX Chevron 112.18 3.82% MCD McDonald's 93.70 3.63% PFE Pfizer 31.15 3.60% GE General Electric 25.27 3.48% MRK Merck 56.79 3.17% CAT Caterpillar 91.53 3.06% 92.45 2.99% XOM KO ExxonMobil Coca-Cola 42.22 2.89%

Answer 1

solution: Let, a) Number of Portfolio of 3 stocks out of 10 that are possible = 1063 t 31 (10-3! = [120] b) Here, . We can see that a stocks (Vzand MCD) for portfolio are already selected So we only have to select I stock However, constrain is that we cannot select ko si XOM. So we only have 6 (10-4) stocks to choose from. → No of portofolio that contains VZ and MCD but neither konst XOM - 6a !!(6-11 67

e) Here, We have to select portfolio such that there are atleast 2 stocks having yield greater than 3.5%. There are 5 stocks with yield greater than 3,5%. No. of Portofolio that contains atleast 2 Stocks having field greater than 30% = No.of portfolio with exactly a Stocks having yield greater than 3.5%. + Nor of portfolio with exactly 3 Stocks having yield greater than 3.5% » No of portofolio that contains atleast 2 Stocks with yield greater than 3.5% = 50 * 50, +, 563 = 51 5! 5! 21 (5-1), 11(5-1)! 3!(5-3)! a 50+10 No. of Portofolio that contains atlaust a Stocks with yield greater than 3.5% 260