An investor buys shares in a business with the objective to sell in one year. The return on investment depends on the state of the economy over the next year. The following table shows the possible states of the economy and the probability of each state. Recession (5%) Average (35%) Boom (60%) Return on Investment -50% 10% 40% Compute the expected return, standard deviation and variance of return on the investment.

(4) An investor buys shares in a business with the objective to sell in one year. The return on investment depends on the state of the economy over the next year. The following table shows the possible states of the economy and the probability of each state. Recession (5%) Average (35%) Boom (60%) Return on Investment -50% 10% 40% Compute the expected return, standard deviation and variance of return on the investment