An investor buys 1 share of ABC Ltd at the price of $32 on December 1, 2019. The firm is not expected to pay any dividends. Consider the following three possible scenarios for the share price on December 1, 2020:

• $50 with a probability of 20%
• $34 with a probability of 50%
• $27 with a probability of 15%
• $20 with a probability of 15%

a) Calculate the expected return for holding the share for a year. (2 marks)

b) Calculate the variance of return and standard deviation of return. (3 marks)