An investor has a choice between two ventures A and B. As the investor sees it, the future holds three possibilities: (bull) A returns 12 %, B returns 3 %, (bear) A return −4 %, B returns 4 %, or (static) A returns 6 %, B returns 0 %. Assume the probabilities are: bull 0.2, bear 0.3, static 0.5. What are the expected returns and risks (standard deviations) for each venture? Same question for a 50–50 allocation of the investor’s resources. What is the allocation giving least risk?