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Question 2 Below is a table of probabilities and expected returns for 2 securities under 3 possible scenarios: Possible outcomes Probability Rate of Return Company

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Question 2 Below is a table of probabilities and expected returns for 2 securities under 3 possible scenarios: Possible outcomes Probability Rate of Return Company G Company H Bullish Trend 0.3 25% Normal Trend 0.4 20% 15% Bearish Trend 0.3 (10)% 15% Required: On the basis of Expected Rate of Return, Standard Deviation, Variance and Coefficient of variation decide which of the above companies is best for investment (Single company Risk analysis). 20

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