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Suppose that a security costs $ 3 , 0 0 0 today and pays off some amount b in one year. Further, suppose that b

Suppose that a security costs $3,000 today and pays off some amount b in one year. Further, suppose that b is uncertain according to the following table of probabilities:
\table[[bi,Probability:],[$3,000,0.1],[,],[$3,300,0.2],[$3,600,0.3],[$3,900,0.2],[$4,200,0.2]]
a. Calculate the retum (in percent) for each value of b.(Note: You may just calculate the total retum and not worry about how this is split up between current yield and capitalgains yield)(Total Point: 2)
b. Calculate the expected retum. Show your work. (Total Point: 2)
c. Calculate the standard deviations of the return. Show your work. (Total Point: 2)
d. Suppose that an investor has a choice between buying this security or purchasing a different security that also costs $3,000 today but pays off $3,300 with certainty in one year. Explain in words, how an investor's choice of which security to purchase related to his degree of risk aversion in this example.
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