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?

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

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

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