(Related to Checkpoint 8.1) (Expected rate of return) - James Fromholz is considoring whother to inwost in a newly formed investment fund. The fund's investment objective is to acquite home mortgago securities at what it hopos witl bo bargain pilces. The fund spensor has suggested to James that the fund's performance with hinge on how the national econorny perforris in the coming yoar, Specifically, he supgested the following possible outcomed: a. Based on these potential outcomes, What is your estimate of the oxpectod rate of roturn from this invostrvent oppoctunity? b. Would you be interested in making such an investment? Nolo that you lose all your money in one year it the econcrry collapses into the worst state or you double your money if the economy enters into a rapid expansion. a. The expected rate of rotum from this investment opportunity is \%. (Found to two decirnal places)