After reading Betar case study on water meter producing company, please evaluate the risks associated with the two options which the company has: internationalization to Mongolia (this target country was considered the best by the company) and development of smart meters.

In order to complete the assignment, you will have to undertake the following steps.

1. Consider 5 scenarios; for each scenario you are given the expected rate of return (see Table 1)

Table 1. Rate of return data

Scenario	Probability	Internationalize (target Mongolia)		Develop smart meters
		Rate of return	Calculation	Rate of return	Calculation
Highly optimistic		40%		30%
Optimistic		30%		20%
Neutral		10%		10%
Pessimistic		0%		0%
Highly pessimistic		-20%		-10%

2. Based on the information, provided in the case study, please consider probability of each scenario. Please note, that the sum of probabilities you assign to each scenario has to be 1.0. There is no incorrect answer to this question, but you need to provide the reasoning, why you chose certain probability for each scenario.

3. Based on the data from Table 1, and the probabilities you have estimated, calculate average rate of return for each option (internationalization and smart meter development), deviation and standard deviation.

4. Based on your calculations on step 3, make a conclusion on which option you will prefer (internationalization or smart meter development), if a company can afford only one investment at a time.