1. Youve owned the following stocks for three years and received returns as follows:

Year A B

1 15% 10%

2 22% 18%

3 -10% -20%

a. Compute the average return of each stock?

b. Which was more risky?

2. Stock J and Stock D have the following probability distributions

Probability Return J Return D

25% 15% 10%

55% 22% 18%

20% -10% -20%

Compute the expected rate of return for each stock.