Assume that you purchase stock at a price of $30 and that the risk-free (T-bill) rate is 3%. Use the data in the following chart to answer parts A, B and C:

A) Calculate the expected return for the stock.

B) Calculate the standard deviation of the stocks return.

C) If you invest 70% of your portfolio in the stock and 30% in T-bills, what would be the expected return and standard deviation of your portfolio?

State of EconomyProbability Recession Normal growth Boom 30% 50% 20% Stock price $15 $35 $50 Dividend $1 %3 $5