Question: Imagine an investor was considering an investment, and there are3 economic conditions:

• Expanding, Neutral, or Deteriorating
• Assume there is a25% probability the economy is expanding, a50% probability the economy isneutral, and a25% economy is deteriorating.
• Imagine that if the economy is expanding the investment will return 4%, if the economy is neutralit'll return 10%, and if the economy is deteriorating it will return 2%.

a. What is the Expected Return on this investment?

b. What is the Standard Deviation?