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Suppose your expectations regarding the stock price are as follows: HPR 2 Ending (including points State of the Market Probability Pr'ice dividends) Boom 8.28 $ 149 53.5% Normal growth 6 . 23 110 26 . 6 Recession 6 .49 80 -17 .0 eBook Use the equations _ E 7- : 2 s 7' s E. () 5pm () Print and 2 7 2 a 713136) H3) , E(r)l R f lli to compute the mean and standard deviation of the HPR on stocks. (Do not round intermediate calculations. Round your answers to E erences 2 decimal places.) Mean % Standard deviation % Derive the probability distribution of the 1-year HPR on a 30-year US. Treasury bond with a coupon of 3.5% if it is currently selling at par and the probability distribution of its yield to maturity a year from now is as shown in the table below. (Assume the entire 3.5% coupon is paid at the end of the year rather than every 6 months. Assume a par value of $100.) (Leave no cells blank - be certain to 2 enter "0" wherever required. Negative values should be indicated by a minus sign. Do not round intermediate calculations. Round points your answers to 2 decimal places.) El Economy Probability YTM Capital Gain eBook Boom 0.25 7.0 % /a Normal Growth 0.40 5.0 /u % if! Recession 0.35 4.0 % % Print ii Refe ren ces 3 What is the standard deviation of a random variable q with the following probability distribution? (Do not round intermediate calculations. Enter your answer in numbers not in percentage. Round your answer to 4 decimal places.) 2 Value of q Probability points 0. 26 NHO 0. 25 0. 49 eBook Standard deviation Print ReferencesDuring a period of severe inflation, a bond offered a nominal HPR of 79% per year. The inflation rate was 69% per year. a. What was the real HPR on the bond over the year? (Round your answer to 2 decimal places.) 4 \"ms Real HPR % b. Find the approximation '"real = rho," - i. Compare your answer in part b to the one in part a. References Approximation % 5 2 a. If you require a risk premium of 6%, how much will you be willing to pay for the portfolio? (Round your answer to the nearest whole points dollar amount.) Consider a risky portfolio. The end-ofyear cash flow derived from the portfolio will be either $95,000 or $240,000 with equal probabilities of 0.5. The alternative risk-free investment in Tbills pays 6% per year. b. Suppose that the portfolio can be purchased for the amount you found in (a)_ What will be the expected rate of return on the R f - e erences portfolio? (Round your answer to the nearest whole number.) Rate of return % c. Now suppose that you require a risk premium of 12%. What price are you willing to pay? (Round your answer to the nearest whole dollar amount.)