Author Question: Project C has an expected value of 500 and a standard deviation of 50. Project D has an expected ... (Read 95 times)

folubunmi · **on:** Jul 1, 2018

Project C has an expected value of 500 and a standard deviation of 50. Project D has an expected value of 300 and a standard deviation of 10. Comment on the desirability of these projects.

What will be an ideal response?

Question 2

Outsourcing generally results from

A) unpatriotic behavior.
B) comparative advantage.
C) tax evasion.
D) rent seeking.

angrybirds13579 · **Reply #1 on:** Jul 1, 2018

Answer to Question 1

CVC = 50/500 = 0.10
CVD = 10/300 = 0.03
Project D has a lower coefficient of variation and thus is more desirable. Even though its expected value is lower, its lower standard deviation (and thus lower risk) makes up for this.

Answer to Question 2

B