(Related to Checkpoint 7.1)

(Expected rate of return and risk)

B. J. Gautney Enterprises is evaluating a security. One-year Treasury bills are currently paying 5.1 percent. Calculate the investment's expected return and its standard deviation. Should Gautney invest in this security?

Probability	Return
0.05	4	%
0.45	4	%
0.45	5	%
0.05	10	%

(Click on the icon in order to copy its contents into a spreadsheet.)