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Economics

An individual has to choose between investment A and investment B. The individual estimates that income and probability of the income from each investment are given in the following table (a) Using Excel's statistical tools, calculate the standard deviation of the distribution of each investment. (b) Which of the two investments is more risky? (c) Which investment should the individual choose?

Investment A Investment B

Income Probability Income Probability

$4,000 0.4 $4,000 0.3

5,000 0.3 6,000 0.4

6,000 0.3 8,000 0.3

7,000 0.2

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Macroeconomics, Economics

Category:- Macroeconomics
Reference No.:- M9469550

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