Principles of Finance Question

Question 1 Helen is considering making an investment to Project Bunga Kertas or Project Bunga Kantan. Project Bunga Kertas is forecasted to produce the following: a 30% probability of 11% return; a 40% probability of a 15% return; and a 30% probability of 19% return. Project Bunga Kantan is forecasted to produce the following: a 20% probability of 5% loss; a 30% probability of a 6% return; and a 50% probability of 22% return. From the above information you are required to answer the following questions. a. Compute the expected rate of return (k^) for each project. b. From your answer in part (a), compute the standard deviation (a) and coefficient variation (CV) for each project. c. Based on your findings in part (b), which project that Helen will be investing to? Explain your