Additional "Turn-In" Problem 1 (Scenario Analysis) GE is currently traded at $25 per share. The following is a scenario analysis for its future share price in one year. Probability, p(s) Share price Dividends Scenario, s GDP23% 3%> GDP21% 1%> GDP20% 0%> GDP -1% -1%> GDP 0.60 0.10 0.04 0.01 $30.00 $26.50 $19.50 $17.50 $12.50 $2.00 $1.00 $0.50 $0.00 S0.00 1. The probability for the first scenario is missing, what is its value? 2. Compute the holding period return (HPR) for each scenario. 3. Draw a histogram of the distribution of future HPRs for GE (see Doc Cam Notes on 2/23). Is it positively or negatively skewed? Explain your answer. 4. Compute the expected return and volatility, and then the "reward-to-volatility" ratio for GE based on this scenario analysis. Assume that the T-bill rate is 1%