(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

3.7

percent. Calculate the investment's expected return and its standard deviation. Should Gautney invest in this security?

Probability	Return
0.20	6	%
0.50	4	%
0.10	5	%
0.20	8	%

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Question content area bottom

Part 1

a.The investment's expected return is

enter your response here%.

(Round to two decimal places.)