The common stock of escapist films sells for 40 a share and


The common stock of Escapist Films sells for $40 a share and offers the following payoffs next year:

Dividend Stock Price

  Boom 0         $26        

  Normal economy $3         41        

  Recession 5         51        

All three scenarios are equally likely.

a. Calculate the expected return of Escapist. (Negative values should be indicated by a minus sign.)

Expected Return _______

  Boom % __________

  Normal economy % ________

  Recession % _____________

b. Calculate the standard deviation of Escapist. (Do not round intermediate calculations. Round your answer to 2 decimal places.)

  Standard deviation % _________________

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Financial Management: The common stock of escapist films sells for 40 a share and
Reference No:- TGS01570657

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