3. The expected return of a small stock portfolio return is 18% and the expected return of a large stock portfolio is 14%. The standard deviation of the small stock portfolio is 27% and that of a large stock portfolio is 15%.

A. (7 points) Suppose an investor invests all his money in one of the two portfolios for one year, with which portfolio does the investor has a better chance of getting a positive return? Provide complete numerical explanation.

B.(9 points) For how many years do you need to invest in the small stock portfolio if you want to achieve an average annual return of above 5% with a probability of 0.95?

C. (8 points) What is the probability of having a large stock portfolio yielding an average annual return of 10% or above in the next 5 years?