You are the risk manager for a tech company, and you are evaluating two possible projects: Project X and Project Y. The following table shows the possible outcomes and their probabilities for each project:

Outcome	Project X (probability)	Project Y (probability)
$50,000 profit	0.4	0.1
$20,000 profit	0.3	0.5
No profit	0.3	0.4

Assuming a risk-free rate of 3%, calculate the expected value, variance, standard deviation, and Sharpe ratio of each project. Based on these metrics, which project would you recommend?

Answer rating: 100% (QA)

The detailed answer for the above question is provided below To evaluate the two projects we first need to calculate their expected values The expecte... View the full answer