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The stock of Business Adventures sells for $80 a share. Its likely dividend payout and end-of-year...

The stock of Business Adventures sells for $80 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:

Stock Price

Dividend

Recession

$76

$0.75

Normal economy

   82

   2.50

Boom

   87

   3.00

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%.

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jeff jeffy answered 2 years ago
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