(Related to Checkpoint 7.1) (Expected rate of return and risk) B. J. Gautney Enterprises is evaluating...

 

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(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 4.7 percent. Calculate the investment's expected return and its standard deviation. Should Gautney invest in this security? Probability 0.10 0.35 0.45 0.10 (Click on the icon in order to copy its contents into a spreadsheet.) Return - 5% 4% 5% 8% a. The investment's expected return is %. (Round to two decimal places.) (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 4.7 percent. Calculate the investment's expected return and its standard deviation. Should Gautney invest in this security? Probability 0.10 0.35 0.45 0.10 (Click on the icon in order to copy its contents into a spreadsheet.) Return - 5% 4% 5% 8% a. The investment's expected return is %. (Round to two decimal places.)

Answer rating: 100% (QA)

To find the investments expected return we need to calculate the weighted average of the returns ... View the full answer