Suppose stock X has a price of $100 today. There are three possible scenarios one year later as detailed below. Let R denote the one-year return of stock X (today to one year later).

Scenario 1 Probability 20% Stock price $80 Dividend $0

Scenario 2 Probability 50% Stock price $105 Dividend $140

Scenario 3 Probability 0% Stock price $5 Dividend $5

Calculate: (a) R in each of these three scenarios. 1 (b) The volatility of R