1. The returns on the shares of R and S have the following distributions of

probability: Yields

Probability	Action R	Action S
0.5	-2%	20%
0.1	10	12
0.4	15	2

a. Calculate the expected return on each stock.

b. Calculate the standard deviation of the returns for each stock and for the portfolio.

Which stock is considered riskier with respect to total risk?

c. Calculate the coefficient of variation for each stock. Based on the coefficient of

variance, which stock is considered riskier?