Cabar Ltd has just been listed on the Johannesburg Securities Exchange and has no return record. An investor has thus predicted the following conditional returns:

State of economy Probability Return

Boom 5% 35% Good 15% 20% Normal 60% 12% Bad 15% 1% Recession 5% 15% REQUIRED: Answer the following questions: a) What is his expected (average) return b) What is the variance and standard deviation of this return?

Standard deviation: