# Expected rate of return and risk for a security

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Carter, Inc., is evaluating a security. One-year Treasury bills are currently paying 9.1 percent.

Calculate the investment's expected return and its standard deviation.

Should Carter invest in this security?

PROBABILITY RETURN

.15 6%

.30 9%

.40 10%

.15 15%

Please show work on expected return and standard deviation

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#### Solution Preview

Expected rate of return and risk

Carter, Inc., is evaluating a security. One-year Treasury bills are

currently paying 9.1 percent. Calculate the investment's expected return and its standard deviation.

Should Carter invest in this security?

PROBABILITY RETURN

.15 6%

.30 ...

#### Solution Summary

This explains the expected rate of return and risk for a security

$2.49