Decision making on the basis of expected return

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Reference no: EM1314219

Decision making on the basis of expected return and volatility of project

Suppose you have two good projects in which you could invest, but due to your resource limitations you can only invest in one of them. Project 1 has an expected return of 16% and a volatility of 20%. Project 2 has an expected return of 25% and a volatility of 30%. If the riskless rate is 4%, which of these two projects would you choose?

1. Project 1

2. Project 2

Reference no: EM1314219

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