The stock of Business Adventures sells for $70 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 Boom $3.00 Normal economy 2.00 Recession 1.50 Expected return Standard deviation Stock price $80 Required: (a) Calculate the expected holding-period return and standard deviation of the holding- period return. All three scenarios are equally likely. (Round your answers to 2 decimal places. Omit the "%" sign in your response.) 73 64 Expected return Standard deviation % % (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 12%. (Round your answers to 2 decimal places. Omit the "%" sign in your response.) % %

The stock of Business Adventures sells for $70 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: Required: (a) Calculate the expected holding-period return and standard deviation of the holdingperiod return. All three scenarios are equally likely. (Round your answers to 2 decimal places. Omit the "\%" sign in your response.) (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 12\%. (Round your answers to 2 decimal places. Omit the "\%" sign in your response.)