Question

(Related to Checkpoint​ 7.1)

​ (Expected

rate of return and

risk​)

  B. J. Gautney Enterprises is evaluating a security. ​ One-year Treasury bills are currently paying

4.1

percent. Calculate the​ investment's expected return and its standard deviation. Should Gautney invest in this​ security?

Probability	Return
0.10	−5	​%
0.35	1	​%
0.45	6	​%
0.10	8	​%

a.  The​ investment's expected return is

nothing​%.

​(Round to two decimal​ places.)b. The​ investment's standard deviation is

nothing​%.

​(Round to two decimal​ places.)

c.  Should Gautney invest in this​ security?  ​(Select the best choice​ below.)

A.

Yes. B. J. Gautney Enterprises should invest in this investment because the return is lower than the Treasury bill and the level of risk higher than the Treasury bill.

B.

No. B. J. Gautney Enterprises should not invest in this investment because the return is lower than the Treasury bill and the level of risk higher than the Treasury bill.

Answer 1

Answer is given in the below attached images

Please give upvote and thank you for that in advance