Question

# B. J. Gautney Enterprises is evaluating a security. ​ One-year Treasury bills are currently paying 2.8...

B. J. Gautney Enterprises is evaluating a security. ​ One-year Treasury bills are currently paying 2.8 percent. Calculate the​ investment's expected return and its standard deviation. Should Gautney invest in this​ security?

 Probability Return 0.20 −5 ​% 0.50 1 ​% 0.10 5 ​% 0.20 10 ​%

The​ investment's expected return is ____(Round to two decimal​ places.)

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

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

A. 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.

B. 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.

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