QUESTION $2$

Consider two investment alternatives, investment I and investment II$,$ with their payoffs and their associated probabilities outlined in the following table:

$\backslash$table$[[$Investment I,Investment II$],[$Payoff $(\%),$Probability,Payoff $(\%),$Probability$],[5,0\mathrm{.}20,10,0\mathrm{.}10],[10,0\mathrm{.}30,2,0\mathrm{.}50],[2,0\mathrm{.}50,5,0\mathrm{.}40]]$

Compute the expected value for investment I and investment II;

Compute the variance for investment I and investment II;

Compute the standard deviation for investment I and investment II;

Compute the Return$-$Risk Index $($RRI$)$ for investment I and investment II;

Would select investment I or investment II$?$ Why?