Give the following hypothetical end- of - period prices for shares of the Drill -on-

Corporation, and assuming a current price of sh. 50 per share

Probability 0.15 0.1 0.3 0.2 0.25

End of Period Price per Share 35 42 50 55 60

i) Calculate the rate of return for each probability; what is the expected return? The

variance of end- of- period return; The range and semi-interquartile range

ii) Suppose forecasting is refined such that probabilities of end- of- period prices can be

broken down further, resulting in the following

Probability 0.01 0.05 0.07 0.02 0.1 0.3 0.2 0.15 0.05 0.05

End of periodprice per share 0 35 38.57 40 42 50 55 57 60 69

a) Calculate and explain the change in the expected returns, the range of returns and the

semi- interquartile range of returns.

b) Calculate the semi variance of the end - of period returns. Why might some investors

be concerned with semi variance as a measure of risk