ABC Ltd is evaluating to invest in two projects. Project X may yield a return of £1.5m with a probability of 20%, or a return of £5m with a probability of 60%. Project Y, instead, may earn a negative return of £3m with a probability of 70% or a positive return of £7m with a probability of 30%. How much is the expected return for project X and Y? [8 marks] 2) What is the standard deviation? [6 marks] 3) Compare and briefly discuss the expected return and risk of the projects.

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ABC Ltd is evaluating to invest in two projects. Project X may yield a
return of £1.5m with a probability of 20%, or a return of £5m with a
probability of 60%. Project Y, instead, may earn a negative return of
£3m with a probability of 70% or a positive return of £7m with a
probability of 30%.

How much is the expected return for project X and Y? [8 marks] 2) What
is the standard deviation? [6 marks] 3) Compare and briefly discuss
the expected return and risk of the projects.

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