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Use the data for Starbucks (SBUX) and Google (GOOG) B to answer the following questions: a. What is the return for SBUX over

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Answer #1
Date SBUX Dividend GOOG Dividend
14-11-2011 43.64 0 613 0
06-02-2012 48.29 0.17 609.09 0
07-05-2012 55.48 0.17 607.55 0
06-08-2012 43.48 0.17 642.82 0
13-12-2012 53.18 0.21 659.05 0
a)
Return for SBUX without including the dividends
(53.18 - 43.64)/(43.64)
21.86%
With the dividends
(53.18 - 43.64 + .17 + .17 + .17 + .21)/(43.64)
23.51%
b)
Return for GOOG over the period
(659.05 - 613)/(613)
7.51%
c)
expected return on a portfolio = XaRa + XbRb
where Xa and Xb are the proportions of the total portfolio in assets A&B
Ra and Rb are the expected returns on the two securities
Ra 21.86%
Rb 7.51%
Xa 0.25
Xb 0.75
Expected return on portfolio .25*.2186 + .75*.0751
Expected return on portfolio 0.110993
The return on your portfolio excluding dividends is
11.10%
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