# Calculate the expected holding-period return and standard deviation

 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 \$54 Normal economy 1.20 48 Recession .95 39

 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 Business Adventures and half in Treasury bills. The return on bills is 4%. (Do not round intermediate calculations. Round your answers to 2 decimal places.)

 Expected return % Standard deviation

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