Vulture Capital needs to choose among possible investment opportunities to select one new research and development project. The following table summarizes six possibilities. Make and show a plot of Expected IRR (vertical axis) vs. Std. Dev. IRR (horizontal axis) and connect the points along the "efficient frontier". Those connected points are the projects to be chosen as good candidates. Which projects are good candidates?
|
Project
|
Expected Value of IRR
|
Standard Deviation of IRR
|
|
A
|
14.8%
|
5.9%
|
|
B
|
11.3%
|
3.5%
|
|
C
|
9.4%
|
5.3%
|
|
D
|
8.1%
|
6.4%
|
|
E
|
13.6%
|
7.0%
|
|
F
|
16.5%
|
11.3%
|
|
G
|
4.0%
|
0.0%
|
|
|
|