Computing reward to risk ratio for project

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Reference no: EM1338494

Q1) Your company is considering two mutually exclusive projects A and B. The expected return and standard deviation of project is A 20% and 15%, respectively. The expected return and standard deviation of project B is 25% and 20%, respectively. The risk-free rate is 8%.

a) What is the reward to risk ratio for project A?

b) What is the reward to risk ratio for project B?

c) Which project do you prefer and why?

Reference no: EM1338494

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