You purchase 100 shares of stock for $25 a share. The stock pays a $2 per share dividend at year-end.

a.What is the rate of return on your investment if the end-of-year stock price is (i) $23; (ii) $25; (iii) $26?(Leave no cells blank - be certain to enter "0" wherever required. Enter your answers as a whole percent.)

b.What is your real (inflation-adjusted) rate of return if the inflation rate is 5%?(Do not round intermediate calculations. Enter your answers as a percent rounded to 2 decimal places. Negative amounts should be indicated by a minus sign.)

and:

Consider the following scenario analysis: Rate of Return Scenario Probability Stocks Bonds Recession [3.20 9% 20% Normal economy I! . 5|) 2 l 3 Boom U . 3|} 3 1 3 a. Is it reasonable to assume that Treasury bonds will provide higher returns in recessions than in booms? O No 0 Yes I). Calculate the expected rate of return and standard deviation for each investment. [Do not round Intermediate calculations. Enter your answers as a percent rounded to 1 decimal place.)