Puan Fatimah is thinking of adding one of two investments to an already well-diversified portfolio. The following are possible rates of return:

Probability of occurrence	Rates of return
	Security Utara	Security Selatan
0.10	-10%	-6%
0.20	5%	9%
0.30	7%	30%
0.40	25%	15%

 

Calculate the investment's expected rates of return and its standard deviation. From the calculation, which one of the investments is the better choice for Puan Fatimah? Explain your answer.

Answer rating: 100% (QA)

Calculate the expected rates of return for the two investments For Security Utara Expected retur... View the full answer