Question: Suppose security B's payoff in one year is $500 if the economy is weak and SO if the economy is strong. Its current price is

Suppose security B's payoff in one year is $500 if the

Suppose security B's payoff in one year is $500 if the economy is weak and SO if the economy is strong. Its current price is $270. a) Compute B's expected rate of return if economy is equally likely to be in the strong and weak 4. state in one year? b) Would anyone want to invest in this security? Why or why not? Explain briefly (short answer, no computations needed)

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