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The corporate bond would be the best choice because it has the highest expected retum and the lowest risk O C. There is not enough information to make this decision OD. The government bond would be the best choice because it has the lowest risk. . , t uie answers you w i Data Table (Click on the following icon in order to copy its contents into a spreadsheet.) Forecasted Returns for Ench Econy INESE Stock Corporate bond Government bond BE 27% 9% 1496 796 696 5% 6% 5% - 11% 496 3% Print Done Variance and standard deviation (expected Hull Consultants a famous think tank in the Midwest has provided probability estimates for the four potential economic states for the coming year in the owing to the pro 5 12 the probability of a stable growth economy is 15, the probability of a stagnant economy is 51 and the probability of a recession is 22% Calculate the variance and the standard deviation of the three investment stock.com government bond the estimates for both the probabilities of the economy and the returns in each state of the economy are correct which investment would you choose considering book andre? En Make sure Hint Make sure to round all intermediate calculations to at least seven (7) decimal places. The input instru What is the variance of the stock investment? % (Round to six decimal places.) What is the standard deviation of the stock investment? % (Round to two decimal places.) What is the variance of the corporate bond investment? % (Round to six decimal places.) What is the standard deviation of the corporate bond investment? % (Round to two decimal places.) What is the variance of the government bond investment? 1% (Round to six decimal places.) What is the standard deviation of the government bond investment? % (Round to two decimal places) of the estimates for both the probabilities of the economy and the returns in each state of the economy are correct, which investment would you choose, considering both risk and return? A. The stock investment would be the best choice because it has the highest volatility and therefore the best chance of a high return OB. The corporate bond would be the best choice because it has the highest expected return and the lowest risk OC. There is not enough information to make this decision D. The government bond would be the best choice because it has the lowest risk
