If we have to choose between Two Random investments (same lifetime), we select that comes with the highest expected present worth. Given the Two Random investments A and B with initial costs of $5000 and $ 7000 respectively. The Return of A after 5 years is a Random variable X with pdf: f(x) = { x, 0 < x < 1 2 x, 1 x < 2}

One unit of X is $ 10,000 The Return of B after 5 years is a Random variable Y with pdf: g(y) = y 2 , 0

One unit of Y is $10,000

a) At a discount rate of 9% a year, which investment is more attractive? b) Find the ROR of A in terms of X. c) Find the ROR of B in terms of Y. d) Calculate Expected value of RORA e) Calculate Expected value of RORB