1. In relation to the previous item: Which year shows a better profitability for Going Merry Inc. ?

a. Year 2020 has better profitability with 3.96 % than the following year with 3.21%

b. Year 2020 has better profitability with 3.21 % than the following year with 3.96 %

c. Year 2020 has better profitability with 2.86 % than the following year with 4.46%

d. Year 2020 has better profitability with 4.46 % than the following year with 2.86%

2. Suppose you are an investor with a choice between three securities that are identical in every way except in terms of their rates of return and risk. Which investment provides the highest expected return?

Investment A: Total return = 10 percent with probability 50 percent Total return = 20 percent with probability 50 percent Investment B: Total return = 12 percent with probability 50 percent Total return = 18 percent with probability 50 percent Investment C: Total return = 5 percent with probability 60 percent