Question: You are given the following data about expected returns on a Bank security on the LUSE where different states of the economy have the

You are given the following data about expected returns on a Bank

You are given the following data about expected returns on a Bank security on the LUSE where different states of the economy have the same probability of occurrence: State Return Strong growth 75% Normal growth 50% Weak growth 15% Recession -25% Required: Compute and fully interpret the following for the investment: 1. The Expected return for the security. 1. The volatility of the security returns using the standard deviation. [5 Marks] [6 Marks] 1. The Sharpe ratio of the returns assuming a risk-free rate of 10%. [4 Marks] 1. Would you recommend investing in this security? Why and why not? [5 Marks] Total 20 Marks

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