a) Salma is considering to invest in either one of the jewelry companies Pearl Berhad or Diamond Berhad. Historical data suggests the following probability distribution for

Salmas returns from these two jewelry companies. Decide which company would give a higher expected return. (7 marks)

Probability of Occurrence	Pearl Berhad	Diamond Berhad
0.15	RM15,000	RM80,000
0.20	RM35,000	RM38,000
0.35	RM48,000	RM45,000
0.22	RM67,000	RM15,000
0.18	RM80,000	RM77,000

b) The following is historical data for Security ABC and XYZ.

i. Calculate the expected return and standard deviation for the securities ABC and XYZ. (14 marks)

Year	Return for Sec ABC	Return for Sec XYZ
1	0.25	0.16
2	0.25	0.15
3	0.35	0.20
4	0.15	0.12
5	0.10	0.09

ii. Justify which of the two securities which an investor will invest in if investor is risk averse. (4 marks)