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Problem 5.1 (a) The stock of Business Adventures sells for $60 a share. Its likely dividend payout and end-of-year price depend on the state of

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Problem 5.1 (a) The stock of Business Adventures sells for $60 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 Recension Dividend Stock Price $2.00 $70 1.80 0.90 54 Calculate the expected holding-period return. All three scenarios are equally likely. (Do not round intermediate calculations. Enter your answer in percentage points. Round your answers to 2 decimal places.) QUESTION 2 Problem 5.1 (b) The stock of Business Adventures sells for $60 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: Dividend Stock Price $70 Normal economy 1.80 Recession 54 Boom $2.00 63 Calculate the standard deviation of the holding-period return. All three scenarios are equally likely. (Do not round intermediate calculations. Enter your answer in percentage points. Round your answers to 2 decimal places.) () QUESTION 3 Problem 5.1 (c) The stock of Business Adventures sells for $60 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 seancy Recession Dividend Stock Price $2.00 $70 63 54 Calculate the expected return of a portfolio Invested half in Business Adventures and half in Treasury bills. The return on bills is 5%. (Do not round intermediate calculations. Enter your answer in percentage points. Round your answers to 2 decimal places.) QUESTION 4 Problem 5.1 (d) The stock of Business Adventures sells for $60 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: Boon Normal woonony Recession Dividend steek Price $2.00 $20 1.80 0.90 54 Calculate the standard deviation of a portfolio Invested half in Business Adventures and half in Treasury bills. The return on bills is 5%. (Do not round intermediate calculations. Enter your answer in percentage points. Round your answers to 2 decimal places.)

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