1 A risk-averse investor is considering two possible assets to be held on a standalone basis. The possible returns and related probabilities (i.e. the probability distributions) for each assets are as follows: \begin{tabular}{|c|c|c|} \hline Asset X & \multicolumn{2}{|c|}{ Asset Y } \\ \hline Prob & rx & ry \\ \hline 5% & 10% & 4% \\ \hline 20% & 2% & 1% \\ \hline 50% & 7% & 6% \\ \hline 20% & 8% & 10% \\ \hline 5% & 12% & 12% \\ \hline 100% & & \\ \hline \end{tabular} Considering both its return and relative risk, which asset is preferred? Why? Or, alternatively - AssetX 1 2 3 3 AssetY 3 \begin{tabular}{|c|c|c|c|} \hline \begin{tabular}{l} Return x \\ Prob \end{tabular} & \begin{tabular}{l} Deviation \\ from Mean \end{tabular} & \begin{tabular}{c} Deviation \\ Squared \end{tabular} & \begin{tabular}{l} Deviation \\ Squared x \\ Probability \end{tabular} \\ \hline0.50% & 10.00% & 1.00% & 0.05% \\ \hline 0.40% & 2.00% & 0.04% & 0.01% \\ \hline 3.50% & 7.00% & 0.49% & 0.25% \\ \hline 1.60% & 8.00% & 0.64% & 0.13% \\ \hline 0.60% & 12.00% & 1.44% & 0.07% \\ \hline & \multirow{2}{*}{\multicolumn{2}{|c|}{\begin{tabular}{r} Variance \\ Standard Deviation \end{tabular}}} & 0.50% \\ \hline & & & \\ \hline & & cV & \\ \hline \end{tabular}