1) You just bought a share of stock of Painter Inc., the manufacturer of Final Four Dreams for $42. You summarize the uncertainty about the rate of return on the stock by specifying four possible scenarios (states):

Business

Conditions Probability(p) End-of-Year Price Annual Dividend

Very Good 0.15 $80 $2.50

Good 0.40 65 2.00

Fair 0.25 35 2.00

Poor 0.20 25 1.00

1. What is the expected return of your investment?
2. What is the standard deviation of your investment?
3. Find the expected return under the assumption that each state (scenario) is equally likely.