A share of stock of A-Star Inc. is now selling for $23.50. A financial analyst summarizes the uncertainty about next year’s holding-period return on the stock by specifying three possible scenarios:

What are the annual holding-period returns of A-Star stock for each of the three scenarios? Calculate the expected HPR and the standard deviation of the HPR.

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Business Conditions High growth Normal growth No growth Scenario, s 123 Probability, p 0.35 0.30 0.35 End-of-Year Price $35 27 15 Annual Dividend $4.40 4.00 4.00