(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 3.7 percent. Calculate the investment's expected return and its standard deviation. Should Gautney invest in this security? Probability 0.05 0.45 0.45 0.05 Return -6% 1% 5% 10% (Click on the icon in order to copy its contents into a spreadsheet.)
(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 3.7 percent. Calculate the investment's expected return and its standard deviation. Should Gautney invest in this security? Probability 0.05 0.45 0.45 0.05 Return -6% 1% 5% 10% (Click on the icon in order to copy its contents into a spreadsheet.)
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
Problem 1PS
Related questions
Question
The expected
The standard deviation is ???
While the expected return for the risk-free assets, Treasury Bills, is ???
The standard deviation is ???
Transcribed Image Text:(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 3.7 percent.
Calculate the investment's expected return and its standard deviation. Should Gautney invest in this security?
Probability
0.05
0.45
0.45
0.05
Return
-6%
1%
5%
10%
(Click on the icon in order to copy its contents into a spreadsheet.)
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