3. Locadidi Fund started the year with a NAV of $28.38. By the end of the year, its NAV had risen to $30.32. The fund paid year-end distributions of income and capital gains of $1.25. What was the pretax return to an investor in the fund?

State of the Mkt	Probability	Ending price	HPR
Boom	.40	85	41.5%
Normal	.30	65	15.0%
Recession	.30	45	-20%

4. Given the information above, what is the mean and standard deviation of HPR?

5.How does the answer to #4 change if the probability of recession rises to 0.5 and boom falls to 0.2?