An initial amount of £1,000 is invested for 10 years.

The return on the investment each year is assumed to be an independent and identically distributed

random variable taking a value of 4% with probability 0.4, 6% with probability 0.2 and 8% with

probability 0.4.

a) Calculate the expected accumulation after 10 years.

b) Calculate the standard deviation of the accumulation after 10 years