Risk and probability Micro-Pub, Inc., is considering the purchase of one of two microfilm cameras, R and S. Both should provide benefits over a 10-year period, and each 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: Data Table a. Determine the range for the rate of return for each of the two b. Determine the value of the expected return for each camera c. Which camera purchase is riskier? Why? Camera R Camera S a. The range for the rate of return for camera R is %. Rou The range for the rate of return for camera s is %. (Round t b. The value of the expected return for camera R is %. (Ro The value of the expected return for camera s is %. (Round c. Which camera purchase is riskier? Why? (Select from the The purchase of Amount Probability Amount Probability $5,000 $5,000 24% 33% Initial investment 1.00 1.00 ! Annual rate of return 20% 0.22 26% 0 Pessimistic Most likely Optimistic 29% 35% 0.44 0.34 0.21 0.52 0.27 Print Done | is riskier because it has a