Q38. An investment has the following possible values in one year Value in one year $100 Probability 20% 10% 60% 10% So $50 $200 Calculate the expected value and the standard deviation of the future values for the investment. Q39. A risk-free investment of $10,000 will return 8%. A risky $10,000 investment has a 50% chance of defaulting and returning only $3,000. What is the expected rate of return on the risky investment? 040. A risk-free investment of $10,000 will return 8%. A risky $10,000 investment has a 50% chance of defaulting and returning only $3,000. How much must the risky investment promise to return? A risk-free investment of $50,000 offers an annual return of 6%. A risky Investment of 550,000 has a 40% probability of default, in which case it will pay only $25,000. 041. Refer to the information above. What is the expected rate of return on the risky investment? 042. Refer to the information above. What return must the risky investment promise? 043. Refer to the information above. What default premium must the risky investment offer An investor is considering a short-term investment in a resort property on a Caribbean island. If the weather is reasonably stable over the next year, the value of the investment is expected to be 51.2 million; however, if this proves to be a heavy hurricane year, the value is expected to be 50.5 million. According to the experts, there is a 40% chance that this will be a year of many hurricanes