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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	%

The stock of Busincss Adventures scls for $25 a sharc. Its kcly dividend payout and cnd-oyar pncc depend on the statc of thc cconomy by the cnd ot the ycar as tollows Boom Normal cconomy Dividend 51.50 1.10 Steck Price $35 21 a. Calculate the expected hoiding-period return and standard dev ation of the holding-parlod return. All three scenarios are equaly lkeiy. (Do not round Intermedlate caiculations. Round your answers to 2 declmal places.) Expected retur Standard deviztion b. Calculate the expected retum and standard deviation of a portfolo invested half n Business Adventures and haif in Treasury bils. The return on bils is 3. Do not round intermediate calculations. Round your answers to 2 decimal places.) Expected retu

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