Expected rate of return and risk​)   B. J. Gautney Enterprises is evaluating a security. ​ One-year Treasury bills are currently paying 2.0 percent. Calculate the​ investment's expected return and its standard deviation. Should Gautney invest in this​ security?   Probability Return   0.20 −7 ​% 0.30 1 ​% 0.30 3 ​% 0.20 7 ​%

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Classification Of Risk

Risk means when there could be a possibility that the returns expected from a particular project or investment may or may not match the investor's expectations. In other words, the uncertainty of an income arising from a source that would either be lower than expected or result in losses in risk exposure of the project. The higher the risk involved, the higher is the return expected by the investor as the investor is exposed to a high level of risk. There are various methods by which different types of risk can be assessed and avoided or mitigated.