5. Aida estimates three possible return outcomes for shares that she is considering to purchase. She predict that there are 45 percent chance the economy will boom, 50 percent chance the economy will continue at its current pace and 5 percent chance that the economy will drop and the expected return for the shares were 25 percent, 50 percent and -10 percent respectively based on the economic condition. Calculate Aida's required rate of return from the share. (3 marks) 6. Harritz Consultants, a famous financial analysis, has provided probability estimates for the four potential economic states for the coming year. The probability of a boom economy 10 percent, stable growth economy 15 percent, stagnant economy 50 percent and recession 25 percent. Below are the estimated returns of the individual investments for the coming year: Forecasted returns for each economy (%) Investment Boom Stable Growth Stagnant Recession Share 25 12 4 -12 Corporate Bond 9 7 5 3 Government Bond 8 6 4 2 If Harritz is a risk averse investor, which investment should he choose? (Show your calculation) (8 marks)