\begin{tabular}{|c|c|c|c|c|c|c|} \hline State of & & & High & & U.S. & Market \\ \hline the Economy & Probability & T-Bills & Tech & Collections & Rubber & Portfolio \\ \hline Recession & 0.1 & 3.0% & (29.5%) & 24.5% & 3.5% & (19.5%) \\ \hline Below Average & 0.2 & 3.0% & (9.5%) & 10.5% & (16.5%)n & (5.5%) \\ \hline Average & 0.4 & 3.0% & 12.5% & (1.0%) & 0.5% & 7.5% \\ \hline Above Average & 0.2 & 3.0% & 27.5% & (5.0%) & 38.5% & 22.5% \\ \hline Boom & 0.1 & 3.0% & 42.5% & (20.0%) & 23.5% & 35.5% \\ \hline & & & & & & \\ \hline \multicolumn{7}{|c|}{ 1. Calculate the expected rate of return on each alternative. } \\ \hline & & & & & & \\ \hline & & & & & & \\ \hline & & & & & & \\ \hline \multicolumn{7}{|c|}{ 2. You should recognize that basing a decision solely on expected returns is appropriate only } \\ \hline \multicolumn{7}{|c|}{ for risk-neutral individuals. Your client is risk-averse, so the riskiness of each alternative } \\ \hline \multicolumn{7}{|c|}{ is an important aspect of your investment decision. To measure the risk, calculate the } \\ \hline \end{tabular}