Chapter 8.3, Problem 58E

To determine

To calculate: The lower risks in case of a market crash if money is invested in one of the two funds, Fast Forward Funds, and Solid-state Securities if the probability distributions of rate of return for two funds for next year in the event of a stock market crash is recorded in the table by the Stock Analysts:

Fast Forward Funds

Rate of Return	$-0.8$	$-0.7$	$-0.6$	$-0.5$	$-0.4$	$-0.2$	$-0.1$	$0$	$0.1$
Probability	$\text{0}\text{.028}$	$\text{0}\text{.033}$	$\text{0}\text{.043}$	$\text{0}\text{.233}$	$\text{0}\text{.176}$	$\text{0}\text{.230}$	$0.111$	$0.044$	$0.102$

Solid State Securities

Rate of Return	$-0.8$	$-0.7$	$-0.6$	$-0.5$	$-0.4$	$-0.2$	$-0.1$	$0$	$0.1$
Probability	$\text{0}\text{.033}$	$\text{0}\text{.036}$	$\text{0}\text{.038}$	$\text{0}\text{.167}$	$\text{0}\text{.176}$	$\text{0}\text{.230}$	$0.211$	$0.074$	$0.035$