The common stock of Escapist Films sells for $$25$ a share and offers the following payoffs next year:

Dividend Stock Price

Boom $ $0$ $ $18$

Normal economy $126$

Recession $334$

The common stock of Leaning Tower of Pita Inc. is selling for $$80$ and offers these payoffs next year:

Dividend Stock Price

Boom $ $8$ $ $240$

Normal economy $490$

Recession $00$

Required:

a$-1.$ Calculate the rate of return of Escapist Films for each economic state.

a$-2.$ Calculate the expected return and standard deviation of Escapist if all three economic scenarios are equally likely to occur.

b$-1.$ Calculate the rate of return of a portfolio half invested in Escapist and half in Leaning Tower of Pita for each economic state.

b$-2.$ Calculate the expected rate of return and standard deviation of a portfolio half invested in Escapist and half in Leaning Tower of Pita. All three economic scenarios are equally likely to occur.