1) Universal Forest's current stock price is $154

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1) Universal Forest's current stock price is $154.00 and it is likely

to pay a $5.23 dividend next year. Since analysts estimate Universal Forest will have a 13.0 percent growth rate, what is its required return?

2) You invest $2,000 in a risky asset with an expected rate of return

of 0.23 (and a standard deviation of 0.20) and a T-bill with a rate of return of 0.03. 


To form a portfolio, knowing that the coefficient of risk aversion equals 5, what optimal dollar amounts of your money must be invested in the risky asset and the risk-free asset, respectively?
Option:
1.) $1,000 and $1,000
2.) $1,500 and $500
3.) $0 and $2,000
4.) $2,000 and $0
5.) Cannot be determined.