1. Megah Holding, a manufacturer of custom golf equipment, wants to choose the better of two investments, A and B. Each requires an initial outlay of RM10,000 and each has a most likely annual rate of return of 15 percent. Management has estimated returns associated with each investments pessimistic and optimistic outcomes.

The three estimates and probability for each asset, are given in the following table:

	Returns (%)	Probability
Asset A:
Pessimistic	13	0.25
Most likely	15	0.50
Optimistic	17	0.25
Asset B:
Pessimistic	7	0.25
Most likely	15	0.50
Optimistic	23	0.25

1. What is the expected return and risk for both assets?

(10 marks)