Which of the two investments is more risky

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Reference no: EM13156735

An individual has to choose between investment A and investment B. The individual estimates that the income and probability of the income from each investment are as given in the following table:

Investment A		Investment B
Income	Probability	Income	Probability
$4,000	0.2	$4,000	0.3
$5,000	0.3	$6,000	0.4
$6,000	0.3	$8,000	0.3
$7,000	0.2

(a) Using Excelâ€^TMs statistical tools, calculate the standard deviation of the distribution of each investment.

(b) Which of the two investments is more risky?

Reference no: EM13156735

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