Green Village, Inc., a successful nursery, is considering several expansion projects. All of the alternatives promise to produce an acceptable return. the owners are risk-averse. Data on four possible projects folloP

Project Expected return Range Standard Deviation

A 12.1 % 0.040 0.029

B 13.7% 0.050 0.032

C 13.2% 0.060 0.045

D 12.5 0.045 0.032

a) Which project is least risky, judging on the basis of range?

b) Explain why the standard deviation is not an appropriate measure of risk for purposes of selecting or undertaking an investment. Please explain thoroughly.

c) Which project will Green Villages owners choose? Support your answer.