Suppose therisk-free interest rate is 6%, and the stock market will return either +37% or 24% eachyear, with each outcome equally likely. Compare the following two investmentstrategies: (1) invest for one year in therisk-free investment, and one year in themarket, or(2) invest for both years in the market.

A. The two possible outcomes for investment (1) are ______% or ______% (Enter the outcomes from largest to smallest. Round to 1 decimal place)

The four possible outcomes for investment (2) are _______% or _______% 0r ______% or______% (Enter the outcomes from largest to smallest. Round to 1 decimal place)

The expected return for investment (1) is ______% Round to 1 decimal place

The expected return for investment (2) is _______% Round to 1 decimal place

The Strategy with the highest expected final payoff is investment 1 or 2?__________

b. The standard deviation for investment (1) is ______% Round to 1 decimal place

The standard deviation for investment (2) is _______% Round to 1 decimal place

The investment with the highest volatility is investment 1 or 2?

c. Does holding stocks for a longer period decrease yourrisk? Yes or no?