A firm is choosing a new product. The following table summarizes six new potential products. Considering expected

Question:

A firm is choosing a new product. The following table summarizes six new potential products. Considering expected return and risk, which products are good candidates? The firm believes it can earn 4% on a risk-free investment in government securities (labeled as Product F).

Standard Deviation Project IRR 1 10.4% 3.2% 9.8 2.3 3 6.0 1.6 4 12.1 3.6 12.2 5 8.0 6 13.8 6.5 0.0a 4.0

Expected Return
The expected return is the profit or loss an investor anticipates on an investment that has known or anticipated rates of return (RoR). It is calculated by multiplying potential outcomes by the chances of them occurring and then totaling these...