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    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

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