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Suppose a stock had the closing price of $ 100 (i.e. 100 USD) today. A...

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Suppose a stock had the closing price of $ 100 (i.e. 100 USD) today. A reputable investment analyst claims that she expects the stock will have the following possible one- year prices and dividend payments below, depending on whether the market turns out to be great, good, poor, or very bad. The stock pays dividend at the end of the one-year holding period. Market Dividends Probability 0.25 Great Good 0.4 End Price $ 131.0 $ 118.5 $ 80.5 $ 44.0 $ 4.0 $ 3.5 $ 2.5 $ 1.0 Poor 0.25 Very bad 0.1 a. Calculate the one-year Holding Period Returns (HPR) of the stock for each four scenario. (2 Marks) b. Supposing that the investment analyst's claim is true, what are the expected returns and the risk (measured by the return variance) of the investment on this stock? (3 Marks) C. State if the following statement is True or False (no explanations needed): Returns on this stock is not a random variable because the probabilities of its future values are known." (2 Marks) d. Calculate the risk premium and the Sharpe ratio of the stock when the risk-free rate is 3%, and briefly explain what they mean

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