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(Expected rate of return and risk) Potts Enterprises is evaluating a security. One-year Treasury bills are currently paying 2.9 percent.

(Expected rate of return and risk) Potts Enterprises is evaluating a security. One-year Treasury bills are currently paying 2.9 percent. Calculate the following investment's expected return and its standard deviation. Should Potts invest in this security?

Probability

Return

0.15

3%

0.3

 2%

0.4

 4%

0.15

 6%

Top Answer

Expected Returns=[ 0.15*3+0.3*2+0.4*4+0.15*6] =3.55% Standard Deviation=   √... View the full answer

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Expected rate of return =... View the full answer

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