Question

Alternate investment outcomes

ossible outcomes for three investment alternatives and their probabilities of occurrence are given below.

 


Alternative 1
Alternative 2
Alternative 3

OutcomesProbability
OutcomesProbability
OutcomesProbability
  Failure$60

0.40

$70

0.20

$70

0.30
  Acceptable
90

0.20


165

0.40


220

0.50
  Successful
120

0.40


250

0.40


395

0.20

 

Rank the three alternatives in terms of least risk to most risk. (Do not round intermediate calculations. Round the final answers to 3 decimal places.)

 


Coefficient of
Variation

Alternative 1
Alternative 2
Alternative 3


 


Alternative
Least risky
|
Most risky



1 0
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