Q$3.$ The stock ofIBM sells for $$50$ a share. Its ilkely dividend payout and end$-$ofyear price

fidepend on the state of the connomy by the end of the vear as follows

a$.$ Calculate the erpected holding$-$period return and standard deviation of the holding$-$

period return. All three scenarios are equally fikely.

b$.$ Calculate the expected return and standard deviation of a portfolio invested halfin

IBM and half in Treasury bills. The return on bills is $4\%$

$($Please follow the above cxample for solution.$)$

Answer: