1. An investor puts $2,000 into an investment that will pay$2,500 one-fourth of the time; $2,000 one-half of the time, and$1,750 the rest of the time. What is the investor's expectedreturn?
2. An investment will pay $2000 a quarter of the time; $1,600half of the time and $1,400 a quarter of the time. The standarddeviation of this asset is:
3. Investment A pays $1,200 half of the time and $800 half ofthe time. Investment B pays $1,400 half of the time and $600 halfof the time. Which of the following statements is correct?
a. Investment A and B have the same expected value, but A has agreater risk
b. Investment B has a higher expected value than A, but alsogreater risk.
c. Investment A has a greater expected value than B, but B hasless risk.
d. None of the statements are correct.
