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1. You bought 100 shares of ABC Inc. common stock at $100 per share today at the opening of the market. ABC Inc. just announced

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1. You bought 100 shares of ABC Inc. common stock at $100 per share today at the opening of the market. ABC Inc. just announced a dividend of $2.00 per share payable in exactly one year from today. It is widely believed that one year from now the economy will either be in a 'recession', a state of 'normal growth', or a 'boom' with probabilities of 30%, 40%, and 30% respectively. After analyzing ABC Inc. you are convinced that the price of ABC stock a year from now in these various states of the economy will be: State of Economy Price of ABC ShareB Recession $80 Normal Growth $110 Boom $130 What are your estimated expected return and volatility over the next year to your investment in ABC stock

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