Your aunty is small time investor. She normally doesnt read economic reports or

analyze fundamental value of investment assets. She was act on friends advice,

rumors and instinct. For a long time,she was complaining that her investment doesnt

bear fruits to her.

One day she asks for basic information sharing session with you at your house. You

love your aunty. You wish to share same basic information that you have acquired is

our degree program. You have strong believe that understanding on risk and return

concept which forms inevitable knowledge for investors will elevate and transform

your aunty become an informed investor.

You have given a small list of information which requires specific information could

be sourced from research department of stock broking and investment company. On

the following week, your aunty visits you with some information as you requested,

return, possible national economic outcome and its chances.

You found the information obtained are amazing due to its detailed statics in nature.

The information was sourced from published weekly report by stock broking

company for their clients. The analyst, who is an economist by profession organized

general economic conditions into five levels, namely super excellent, excellent,

normal, bad and worst.

The respective chances of occurrence are 4%, 24%, 45%, 21% and 6% orderly. Your

aunty also manages to collect information from investment advisory office that

forecasted rate of return for two popular investments asset. The assets are called

Alpha and Beta.

The rate of return for Alpha is organized as per economy performance corresponding

order: 18%, 25%, 30%, 22% and 5%. The rate of return for Beta is organized as

follows: 25%, 22%, 20%, 15% and 10%. You have praised your aunts ability to

obtain such relevant information.

Your aunty is a risk averse person. You are required to calculate and explain on the

expected rate of return, standard deviation of individual investment asset. Youre

also required to calculate and