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1. Summerville Inc. is considering an investment in one of two common stocks. Given the information: COMMON STOCK A COMMON STOCK B PROBABILITY RETURN PROBABILITY
1. Summerville Inc. is considering an investment in one of two common stocks. Given the information:
COMMON STOCK A | COMMON STOCK B | ||
PROBABILITY | RETURN | PROBABILITY | RETURN |
0.2 | 12% | 0.2 | -4% |
0.6 | 14% | 0.3 | 5% |
0.2 | 20% | 0.3 | 14% |
0.2 | 21% |
which investment is better, based on the risk (as measured by the standard deviation) and return of each?
B1. The standard deviation for Stock A is___ % (Round to two decimal places and assume %)
B2. The standard deviation for Stock B is ____% (Round to two decimal places and assume %)
Please post calculations and formulas!
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