iv. a) Write short answers on the following: i. Describe the different types of investors with examples? (2 marks) What is the risk-free rate and what is the risk premium? (2 marks) What is an investment portfolio? (2 marks) Describe how we can reduce the unique risk (diversifiable risk)? (4 marks) b) Tommy is considering investing in a share, but he is aware that the return on that investment is particularly sensitive to how the economy is performing. His analysis suggests that four states of the economy can affect the return on the investment as per the table of returns and probabilities below. Economy States Probability Return a. Boom 0.2 35.00% b. Good 0.4 20.00% c. Level 0.2 10.00% d. Slump 0.2 -15.00% Required: Find the expected return and the standard deviation (risk) of the return on Tommy's investment (10 marks)