Calculate the expected return of the security

Reference no: EM131958218

Question: A company is evaluating a security as a standalone investment. The risk-free rate of return is 5.1% per annum. The probability distribution of annual returns for the security is given in the table below:

Return	Probability
-2%	0.15
5%	0.3
7%	0.4
10%	0.15

(a) Calculate the expected return of the security.

(b) Calculate risk (standard deviation) of the security.

Reference no: EM131958218

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