The stock of Lee Corp. sells at $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 $50 Normal Economy $1 $43 Recession $0.5 $34 a. Calculate the expected holding period return and standard deviation of the holding period return. All three scenarios are equally likely. b. Calculate the expected return and standard deviation of a portfolio invested half in Lee Corp. and half in Treasury bills. The return on T bills is 4%.

Ryan is deciding between attending western state university and eastern state university. he cannot attend both universities simultaneously. both are fine universities, but the reputation of western is slightly higher, as is the tuition. let mu subscript upper e and mu subscript upper w be ryan's marginal utilities from attending eastern and western state universities respectively and upper p subscript upper e and upper p subscript upper w be the prices of attending eastern and western state universities. using the rule of consumer optimum, ryan will decide to attend eastern state university, if mue/pe exceeds muw/pw attend eastern state university if mue/pe is less than muw/pw attend western state university, if pe/mue< pw/muw attend western state university, since it gives him more utility.