2. Consider the following two investment proposals and their returns under different economic scenarios.

Economic Scenarios

Probability

Return on GE stock

Return on TI stock

Bear

0.5

25%

-2%

Normal

0.2

4%

19%

Bull

0.3

-15%

32%

Determine:

a) Standard Deviations

b) Coefficient of Variation

c) Based on a & b, which stock is safer in the time of volatility. You need to explain why.