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Mike Riskless is considering 2 projects. He has estimated the IRR for each project under 3 possible scenarios and assigned probabilities of occurrence to each
- Mike Riskless is considering 2 projects. He has estimated the IRR for each project under 3 possible scenarios and assigned probabilities of occurrence to each scenario. (compute your answer using 6 decimals and round your final answer to 2 decimals)
| State of Economy | Probability | Estimated ATIRR-I | Estimated ATIRR-II |
| Optimistic | 30% | 15% | 20% |
| Most Likely | 40% | 10% | 15% |
| Pessimistic | 30% | 5% | 5% |
Riskless is aware that the pattern of returns for Investment II looks very attractive relative to Investment I. However, he believes that Investment II could be riskier than Investment I. What is the expected return to risk ratio for investment II?
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