Risk and probability Micro$-$Pub, Inc., is considering the purchase of one of two digital cameras, $R$ and $S,$ each of which requires an initial investment of $$4,000.$ Management has constructed

the following table of estimates of rates of return and probabilities for pessimistic, most likely, and optimistic results:

a$.$ Determine the range for the rate of return for each of the two cameras.

b$.$ Determine the value of the expected return for each camera.

c$.$ Which camera purchase is riskier? Why?

a$.$ The range for the rate of return for camera $R$ is

$\%.($Round to the nearest whole number.$)$

The range for the rate of return for camera $S$ is

$\%.($Round to the nearest whole number.$)$

b$.$ The value of the expected return for camera $R$ is

$\%.($Round to two decimal places.$)$

The value of the expected return for camera $S$ is

$\%.($Round to two decimal places.$)$

c$.$ Which camera purchase is riskier? Why? $($Select from the drop$-$down menus.$)$

The purchase of

is riskier because it has a

range for the rate of return.

Data table

$($Click on the icon here $$ in order to copy the contents of the data table below into

a spreadsheet.$)$