Airline companies' sales are pro-cyclical, that is sales are expected to increase during expansions and decrease during recessions. An investor would like to investigate the opportunity of buying shares in Flying Elephant Airlines. He hires you as a financial consultant to estimate the standalone risk of such an investment using prospective analysis. Economic Scenarios Probability or weight Returns Recession 0.05 -15% Below average 0.2 -10% Average 0.5 5% Above average 0.2 10% Expansion 0.05 15%

Economic Scenarios	Probability or weight	Returns
Recession	0.05	-15%
Below average	0.2	-10%
Average	0.5	5%
Above average	0.2	10%
Expansion	0.05	15%