For a bond of a given par value, the higher the investor's required rate of return...

For a bond of a given par value, the higher the investor's required rate of return is above the coupon rate, the

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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