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PLEASE SHOW ALL WORK The stock of XYZ sells for $75 a share. Its likely dividend payout and end-of-year price depend on the state of

PLEASE SHOW ALL WORK

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The stock of XYZ sells for $75 a 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: Boom Normal economy Recession Dividend $2.50 1.30 0.75 Stock Price $83 77 65 a. Calculate the expected holding-period return and standard deviation of the holding-period return. All three scenarios are equally likely. (Do not round intermediate calculations. Round your answers to 2 decimal places.) Expected retum Standard deviation 2.02% 10.88% b. Calculate the expected return and standard deviation of a portfolio invested half in XYZ stock and half in Treasury bills. The return on bills is 5%. (Do not round intermediate calculations. Round your answers to 2 decimal places.) % Expected return Standard deviation %

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