Suppose security C is expected to be worth $800 if the economy is weak and $300 if the economy is strong in one year (with equal probabilities). Currently the price of the security is $500 a. Compute possible rates of return for the security over the coming year. b. Compute expected rate of return of the security c. Find range for possible values o returns e. Think again - is security C more/less risky than the average? - You are considering a risk-free investment that costs $4000 and pays $5000 in one year. - You can either pay all cash for the investment or you can borrow part and pay cash for the other part. If you borrow $2000, you will be required to pay back $2,080 in one year. - The risk-free rate is 4%. - What is the project's NPV? Is the NPV affected if you borrow? Explain