Comparing Investments.

1. What concept does the mean of a discrete random variable generalize?

Comparing Investments. Suppose that the random variables X and Y represent the amount of return on two different investments. Further suppose that the mean of X equals the mean of Y but that the standard deviation ofX is greater than the standard deviation of Y.

a. On average, is there a difference between the returns of the two investments? Explain your answer.

b. Which investment is more conservative? Why?