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 $$5,000.$ 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.$)$

$\backslash$table$[[,$Camera R$,$Camera S$],[,$Amount,Probability,Amount,Probability$],[$Initial investment,$$5,000,1\mathrm{.}00,$$$5,000,1\mathrm{.}00],[$Annual rate of return,,,,$],[,$ Pessimistic,$21\%,0\mathrm{.}23,17\%,0\mathrm{.}21],[$Most likely,$27\%,0\mathrm{.}47,26\%,0\mathrm{.}59],[$Optimistic$,30\%,0\mathrm{.}30,35\%,0\mathrm{.}20]]$

the last question part C the options are The purchase of $($ Camera S; Camera R$)$ is riskier because it has a $($larger; smaller$)$ range for the rate of return.