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The common stock of Escapist Films sells for $50 a share and offers the following payoffs next year: Dividend Stock Price Boom 0 $35 Normal
The common stock of Escapist Films sells for $50 a share and offers the following payoffs next year: |
Dividend | Stock Price | |
Boom | 0 | $35 |
Normal economy | $2 | 52 |
Recession | 4 | 60 |
All three scenarios are equally likely. |
a. | Calculate the expected return of Escapist. (Negative values should be indicated by a minus sign.) |
Expected Return | |||
Boom | % | ||
Normal economy | % | ||
Recession | % | ||
b. | Calculate the standard deviation of Escapist. (Do not round intermediate calculations. Round your answer to 2 decimal places.) |
Standard deviation | % |
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