3. The stock of Business Adventures sells for $100 per share. Its likely dividend payout and end-of year price depend on the state of the economy by the end of the year as follows: Probability of Scenario 0.5 0.25 0.25 Dividend Boom $2.00 Normal economy $1.00 Recession $0.00

A) Calculate the expected holding period return and standard deviation of the holding-period return. Stock Price $150 $115 $84

B) Calculate the expected return and standard deviation of a complete portfolio invested 60% in Business Adventures and 40% in Treasury bills. The return on the T-bill is 3%.