Siyabonga Ltd is attempting to measure the riskiness of two projects which have the

following cash flows in different, equally likely, states of the economy

State of the economy Project G Project H

State $1900900$

State $2800500$

State $3400400$

State $4300300$

State $5200100$

Required:

$($a$)$ Establish, using standard deviation of cash flows as a measure of risk, which

project is riskier? $(6)$

$($b$)$ Establish, using co$-$efficient of variation of cash flows as a measure of risk,

which project is riskier? $(6)$

$($c$)$ Explain which measure of risk you would prefer $(3)$