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The stock of XYZ sells for $50 a share. Its likely dividend payout and end-of-year price depend on the state of the economy by the

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The stock of XYZ sells for $50 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 $3.00 Boom Normal economy Recession 1.20 Stock Price $60 58 49 0.75 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.) Expected return Standard deviation b. Calculate the expected return and standard deviation of a portfolio invested half in XYZ stock and half in Treasury bills. The retum on bills is 5%. (Do not round intermediate calculations. Round your answers to 2 decimal places.) Expected return Standard deviation % %

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