Given the following hypothetical end-of-period prices for shares of the Drill-On Corporation,

and assuming a current price of $50 per share:
(a) Calculate the rate of return for each probability. What is the expected return? The variance of end-of-period returns? The range? The semi-interquartile range?
(b) Suppose forecasting is refined such that probabilities of end-of-period prices can be broken down further, resulting in the following distribution:

Calculate and explain the change in the expected return, the range of returns, and the semi- interquartile range of returns. Calculate the semivariance of end-of-period returns. Why might some investors be concerned with semivariance as a measure of risk?

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15 10 30 20 25 End-of-period price per share 35.00 4200 50.00 55.00 60.00 Probability Probability 005 .07 02 10 .3020 050 End-of-period price per share 0 35.00 38.5740.00 42.00 50.00 55.00 57.00 6000 69.00