Suppose the risk-free interest rate is 5%, and the stock market will return either +40% or -20% each year, with each outcome equally likely. Compare the following two investmentstrategies: (1) invest for one year in the risk-free investment, and one year in the market, or (2) invest for both years in the market.

what is the expected return for investment 1?

what is the expected return for investment 2?