Investment advisors recommend risk reduction through international diversification. International investing

allows you to take advantage of the potential for growth in foreign economies, particularly in emerging

markets. Janice Wong is considering investment in either Europe or Asia. She has studied these markets

and believes that both markets will be influenced by the U$.$S$.$ economy, which has a $18\%$ chance for being

good, a $55\%$ chance for being fair, and a $27\%$ chance for being poor. Probability distributions of the returns

for these markets are given in the accompanying table.

a$.$ Find the expected value and the standard deviation of returns in Europe and Asia. $($Round intermediate

calculations to at least $4$ decimal places and final answers to $2$ decimal places.$)$

b$.$ What will Janice pick as an investment if she is risk neutral?

Investment in Asia

Investment in Europe