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 $2,000. Management has constructed the following table of estimates of rates of retum 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? \begin{tabular}{|ccccc} \hline & \multicolumn{2}{c}{ Camera R } & \multicolumn{2}{c}{ Camera S } \\ \cline { 2 - 5 } & Amount & Probability & Amount & Probability \\ \hline Initial investment & $2,000 & 1.00 & $2,000 & 1.00 \\ Annual rate of return & & & & \\ Pessimistic & 16% & 0.27 & 22% & 0.22 \\ Most likely & 29% & 0.46 & 27% & 0.56 \\ Optimistic & 34% & 0.27 & 33% & 0.22 \\ \hline \end{tabular}