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2. You bought a share of Stock B today at $75/ share and plan to sell it in a year. You expect to receive a
2. You bought a share of Stock B today at $75/ share and plan to sell it in a year. You expect to receive a dividend of $2.50/ share. Furthermore, you predict that the stock price in one year will vary with the state of the economy. In particular, you expect the following distribution of stock prices in one year (20 points): The risk free rate is 3%. Use Excel and follow the equations introduced in the class a. calculate the holding period returns for each of the economic scenarios b. Calculate the expected return as the probability weighted average return c. Calculate the return standard deviation d. Calculate the Sharpe Ratio
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