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Your savings is $100000 and you are deciding whether to use all of them to start a small business or invest in the market index.
Your savings is $100000 and you are deciding whether to use all of them to start a small business or invest in the market index. The expected return of business is 20%, the standard deviation is 40%; the expected return of the market index is 12%, and its standard deviation is 25%. The risk-free of return is 2%. Which one will you select?
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