Consider the following returns for two investments A and B o

Consider the following returns for two investments, A and B, over the past four years:

Solution

The table above gives the mean and std deviation.

---------------------------------------------------------

a) Mean of I 2.5

Mean of II 3.75

a.2 Higher return is Investment 2 as mean is more.

b)1 Less risk means less std deviation.

Hence investment I less risk.

c)