answer question b&c

Related to Checkpoint 8.2) (Computing the standard deviation for an individual investment) James Fromholtz is cansidening whother to invest in a nowly formed investment fund. The fundt nvestrent objective is to acquie home mortgage securites at what it hopes will be bargain prices. The fund sponsor has suggested to James that the tund's performance will hinge on how the na:lonal econorty performs in the corring year, Specifically, he suggested the folowing possible outcomes: a. Based on these potential outcomes, what is your estimate of the expected rate of return from this imvestment opportunity? b. Calcutate the standard devation in the anticipased returns found in part a c. Would you be interested in making such an investment? Note that you lose all your money in one year if the economy collapses inte the worst stale or you double your money if the econamy enters into a rapid expansion. Data table a. The expected b. The invesimed (Reiated to Checkpoint 8.2) (Computing the standard deviation for an individual investment) dames Frombolz is cenaidering whiether to invest in a hesty formed irvestrent find. The Angr irvestment objective is to acquire home mortgage securites at what it hopes will be bargain prices. The fund sponsor has suggesied to james that the fungh performance wit henge on how the national economy performs in the coming year. Specifically, he suggested the following possible cutcomes: a. Based on these potential outcomes, what is your estimate of the expected rate of retum from this investment oppertunity? b. Calculate the standard deviation in the anticipaled returns found in part a c. Would you be interested in making such an investment? Note that you lose all yout money in one year it the economy collapses into the worst state or you douciu your maney it the ecchomy. enters into a rapid expansion. a. The expected rate of return from this investment oppertunity is % (Round to two docimal places) b. The investment's standard deviation is \%. (Round to two decimal places)