Imagine an investor was considering an investment, and there are 3 economic conditions: • Expanding, Neutral, or Deteriorating • Assume there is a 25% probability the economy is expanding, a 50% probability the economy is neutral, and a 25% economy is deteriorating • Imagine that if the economy is expanding the investment will return 4%, if the economy is neutral it'll return 10%, and if the economy is deteriorating it will return 2%. 1. What is the Expected Return on this investment? 2. What is the Standard Deviation?

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Hello, need help with the following statistics problem, thank you in advance!

Imagine an investor was considering an investment, and there are 3 economic conditions:
Expanding, Neutral, or Deteriorating
Assume there is a 25% probability the economy is expanding, a 50% probability the economy is neutral, and a 25%
economy is deteriorating
• Imagine that if the economy is expanding the investment will return 4%, if the economy is neutral it'll return 10%, and
if the economy is deteriorating it will return 2%.
1. What is the Expected Return on this investment?
2. What is the Standard Deviation?
Transcribed Image Text:Imagine an investor was considering an investment, and there are 3 economic conditions: Expanding, Neutral, or Deteriorating Assume there is a 25% probability the economy is expanding, a 50% probability the economy is neutral, and a 25% economy is deteriorating • Imagine that if the economy is expanding the investment will return 4%, if the economy is neutral it'll return 10%, and if the economy is deteriorating it will return 2%. 1. What is the Expected Return on this investment? 2. What is the Standard Deviation?
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