An investor buys 1 share of ABC Ltd at the price of $32 on December 31, 2019. The firm is not expected to pay any dividends. Consider the following three possible scenarios for the share price on December 31, 2020:

$20 with a probability of 25%

$39 if the economy is "moderate", with a probability of 60%

$45 if the economy is "bad" with a probability of 15%

a) Calculate the expected return for holding the share of a year ?

b) Calculate the variance of return and the standard deviation of return ?

c) On January 1, 2021, the share is worth $29.5 and the investor just received a dividend of $2.35. Calculate the total holding period return and dividend yield over the one-year period.

d) Give one example of a diversifiable risk, and one example of a systemic risk. Clearly label your examples.

e) Consider the statement "The primary goal of diversification is to minimise risk" Is this true or false? Discuss why?

(If any parts of the question use values from earlier parts, use the EXACT values from earlier parts)

For interest rates, give the answer as a percentage rounded to 2 decimal places