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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 50% 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). Total 35 marks

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