The stock of Business Adventures sells for $40 a share. Its likely dividend payout and end-of-year price depend on the state of the economy by the end of the year as follows:

Dividend Stock Price

Boom $2.00 $52

Normal economy 1.40 44

Recession 0.70 34

a.Calculate the expected holding-period return and standard deviation of the holding-period return. All three scenarios are equally likely.(Do not round intermediate calculations. Round your answers to 2 decimal places.)

b.Calculate the expected return and standard deviation of a portfolio invested half in Business Adventures and half in Treasury bills. The return on bills is 3%.(Do not round intermediate calculations. Round your answers to 2 decimal places.)