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The stock of Business Adventures sells for $25 a share. Its likely dividend payout and end-of-year...

The stock of Business Adventures sells for $25 a share. Its likely dividend payout and end-of-year price depend on the state of the economy by the end of the year as follows:

  

Dividend Stock price
  Boom $1.50     $35      
  Normal economy 1.10     30      
  Recession .55     21      
a.

Calculate the expected holding-period return and standard deviation of the holding-period return. All three scenarios are equally likely. (Do not round intermediate calculations. Round your answers to 2 decimal places.)

  Expected return %
  Standard deviation %
b.

Calculate the expected return and standard deviation of a portfolio invested half in Business Adventures and half in Treasury bills. The return on bills is 3%. (Do not round intermediate calculations. Round your answers to 2 decimal places.)

  Expected return %
  Standard deviation %

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