11-12

10. The arithmetic average of -11%, 15%, and 20% is a. 15.67% b. 8.00% c. 11,00% d. 6,45% 11. The stock of the Famous Company, Inc. sells for $40 per share. Its likely dividend payout and end-of-the-year price depends on the state of the economy by the end of the year as follows: Boom Normal Economy Recession Dividend $2.00 $1.00 $0.50 Stock Price $50 $42 #34 Calculate the expected holding return and Standard Deviation of the holding return. All three scenarios are equally likely. a. 6.85% & 18.67 b.9.50% & 17.23% c. 8.75% &17.88% d, 8.87% & 18.02% 12. Use the information from Question #11 to calculate the following: Calculate the expected return and standard deviation of a portfolio Invested half in Famous Company stock and half in Treasury bills. The return on the bills is 4%. a. 6.375% & 8.94% b. 6.475% & 8.56% c. 6.785%&9.03% d. 7.04% & 9.45%