|
Name
|
Symbol
|
Exp Price date (p1)
|
Price today\'s date close (p0)
|
Gain/loss
|
Expected Dividend -same as previous year
|
Return Percentage
|
Stock Beta from Yahoo
|
Desired Portfolio Percent
|
|
Ebay Inc.
|
EBAY
|
mce_markernbsp; 22.27
|
mce_markernbsp; 23.60
|
mce_markernbsp; (1.33)
|
$0.00
|
-5.64%
|
1.75
|
15%
|
|
Sun Trust Bank
|
STI
|
mce_markernbsp; 19.18
|
mce_markernbsp; 22.55
|
mce_markernbsp; (3.37)
|
$0.75
|
-11.62%
|
1.27
|
30%
|
|
Safeway Inc.
|
SWY
|
mce_markernbsp; 20.71
|
mce_markernbsp; 19.72
|
mce_markernbsp; 0.99
|
$0.37
|
6.90%
|
0.66
|
35%
|
|
Starbucks Corp.
|
SBUX
|
mce_markernbsp; 17.64
|
mce_markernbsp; 20.65
|
mce_markernbsp; (3.01)
|
$0.00
|
-14.58%
|
1.32
|
20%
|
|
|
|
mce_markernbsp; 79.80
|
mce_markernbsp; 86.52
|
|
|
|
|
100%
|
Apply each of the four stocks selected for your portfolio last week
[A] Compute the Security Market Line [SML] equation for each stock.
[B] Suppose a United State Treasury rate of 3% as the risk free rate in your SML. Use the beta for your stock
[C] What does the SML tell you about your portfolio of stocks? How can the SML assist in forecasting the expected return on your stocks?