Consider the two options in the following table, both of which have random outcomes:

Option 1		Option 2
Probability of Outcome	Possible Outcomes ($)	Probability of Outcome	Possible Outcomes ($)
0.06	150	1/5	120
0.25	400	1/5	255
0.38	750	1/5	1,500
0.25	200	1/5	255
0.06	150	1/5	120

a. Determine the expected value of each option. Expected value of Option 1: $

Expected value of Option 2: $ b. Determine the variance and standard deviation of each option. Instruction: Round your answers for standard deviation to 2 decimal places. Variance of Option 1:

Standard deviation of Option 1:

Variance of Option 2:

Standard deviation of Option 2: c. Which option is most risky? multiple choice

• Option 1

• Option 2