Discrete Random Variables

An investor is considering investment in 4 different projects. The following table shows the potential cashflows CFi for each of the projects and their respective probability (CFi) For each of the projects calculate: The expected cashflow (CFi), the variance of the cashflow (CFi) and the standard deviation of the cashflow sigma i If the investor wants to invest in the project that has the highest expected cashflow, which project will he invest? If the investor instead wants to invest in the project that has the highest ratio of expected cashflows to standard deviation of cashflows, in which project will he invest