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The spreadsheet shows the payout over a sample of time from Risk A and Risk B. These risks are of equal size, and impact the
The spreadsheet shows the payout over a sample of time from Risk A and Risk B. These risks are of equal size, and impact the same firm. The standard deviation of the joint impact of the two risks on the firm is 9.85. Which of the two risks is the more attractive? Should you transfer/mitigate/avoid the less attractive risk? Explain/justify your answers.
\begin{tabular}{rr} \multicolumn{1}{r}{ Risk A } & Risk B \\ \hline 22.09544 & -10.9267 \\ 16.70111 & -5.02223 \\ -0.00422 & 10.67954 \\ 7.281398 & 4.036907 \\ 11.82783 & 0.019033 \\ -19.9253 & 19.83218 \\ -0.39401 & 13.55141 \\ 1.258506 & 9.977245 \\ 5.863564 & 6.959834 \\ 15.95856 & -3.90325 \\ 19.3618 & -7.97909 \\ 28.75072 & -16.9108 \\ 6.750027 & 5.014305 \\ \hline 5.8039 & 6.014312 \\ 26.45281 & -13.3156 \\ \hline-4.39785 & 17.27477 \\ 13.80943 & -0.90455 \\ 27.63428 & -19.4438 \\ 10.90857 & 0.703612 \\ \hline 3.509512 & 7.93831 \\ 2.470685 & 8.846546 \\ 9.303371 & 3.462234 \\ 9.328589 & 1.934489 \\ 14.6098 & -3.13632 \\ \hline 21.03746 & -10.1025 \\ 18.55136 & -7.38406 \\ 13.93973 & -1.90374 \\ 18.80068 & -5.69881 \\ 10.08624 & 1.490865 \\ -2.34487 & 15.39264 \\ & \\ \hline \end{tabular}Step by Step Solution
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