CHAPTER 12 HOMEWORK You should show detailed calculations/processes and explanations. Answer itself is NOT sufficient. 1. Consider the two options in the following table, both of which have random outcomes: Option 1 Option 2 Probability of Possible Probability Possible Outcome Outcomes ($) of Outcome Outcomes ($) 1/16 150 1/5 120 4/16 300 1/5 255 6/16 750 1/5 1,500 4/16 300 1/5 255 1/16 150 1/5 120 a. Determine the expected value of each option. b. Determine the variance and standard deviation of each option. c. Which option is most risky