Answer the following questions based on the given information from table of probability distributions and rate of return investment of two companies namely; Celecom Bhd. and Pos Selaju Bhd. shares...

Answer the following questions based on the given information from table of probability
distributions and rate of return investment of two companies namely; Celecom Bhd. and
Pos Selaju Bhd. shares below:


Table 2: Probability distributions and rate of returns for Celecom Bhd. and Pos Selaju

Bhd.

State of Economy Probability of the States Return (%)
Celecom Bhd.

Return (%)
Pos Selaju Bhd.
Boom 0.30 25 40
Normal 0.50 20 10
Recession 0.20 15 20

(i) Solve for the expected rate of return for Celecom Bhd. and Pos Selaju Bhd.
shares.


(ii) In your opinion, which share is more worth the profit for investment and why?