. Suppose you purchase a stock for $100. Assume your expectations regarding the stock price...

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Accounting

. Suppose you purchase a stock for $100. Assume your expectations regarding the stock price are as follows:

State of the Economy

Probability

Year end price

Cash dividends

Holding period return(HPR)

Boom

0.3

129.50

4.50

0.34

Normal growth

0.5

110.00

4.00

0.14

Recession

0.2

80.50

3.50

-0.16

Compute the Mean and standard deviation of the HPR on stocks.

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