An investor has two investment opportunities each involving

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An investor has two investment opportunities each involving an outlay of $10,000. The present value of possible outcomes and their respective probabilities are

               Investment I                              Investment II

Outcome $4,000 $6,000                          $3,000 $5,000 $7,000

Probability 0.6   0.4                                      0.4    0.3      0.3

(a) calculate the expected value of each investment.

(b) draw a bar chart for each investment.

(c) calculate the standard deviation of each project.

(d) Determine which of the two investments the investor should choose.

Reference no: EM13378742

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