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Question 6 (9 marks) The parts a) and b) below are independent questions which do not relate to each other. a) Adele purchased a
Question 6 (9 marks) The parts a) and b) below are independent questions which do not relate to each other. a) Adele purchased a share at the price of $50 right after the dividend payment. The share pays a dividend every year. Adele expects the price per share and the dividend payment per share in one year would be as follows according to the probabilities. Probability Price Dividend 30% $65 $3.00 50% $56 $2.50 20% $40 $1.80 Using this information answer parts i) and ii) below: 1) Calculate the expected return for this share if Adele plans to sell the share in one year. (Round your answer to the nearest 0.01%) (3 marks) I Calculate the standard deviation for Adele's investment if she plans to sell the share in one year. (3 marks)
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