Question: You should recognize that basing a decision solely on expected returns is appropriate only for risk-neutral individuals. Because your client, like most people, is risk-averse,

You should recognize that basing a decision solely on expected returns

is appropriate only for risk-neutral individuals. Because your client, like most people,

You should recognize that basing a decision solely on expected returns is appropriate only for risk-neutral individuals. Because your client, like most people, is risk-averse, the riskiness of each alternative is an important aspect of the decision. One possible measure of risk is the standard deviation of returns. (1) Calculate this value for each altemative and ll in the blank on the row for in the table. (2) What type of risk is measured by the standard deviation? (3) Draw a graph that shows rougth the shape of the probability distributions for High Tech, U.S. Rubber, and T-bills

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