1. Calculate the expected returns on the following investment. In one year the probabilities of the following outcomes are as follows. A return of $25,000 is 30 % likely. A return of $50,000 is 40 % likely. A return of $100,000 is 20% likely. A return of $10,000 is 10% likely. (1 mark) 2. As an accountant you have a client who does not like to take a large amount of risk with their investments. They have some money to invest and they ask you to tell them your thoughts on which asset classes are the least risky through to those that are most risky. They are considering investments in Property, Shares or Bonds. What will you tell them about the relative historical risks of these investments and their returns. (1 mark). b. From you understanding of the investment markets, what general rule could they use to reduce the risk of their portfolio? (1 mark). a. 3. The CAPM model divides the risks that investors encounter into two categories. Identify and briefly discuss these. (2 marks)