A. Brown and Jestley Products are expected to choose between two asset purchases. The

annual rate of return and related probabilities given below summarize the firms

analysis.

State of Economy	Probability of State of Economy	Rate of Return if state Occurs Stock A Stock B
Boom	.20	18% 22%
Good	.35	15 6
Poor	.30	-5 11
Bust	.15	12 14

Required

i. Calculate the expected return of the two assets

ii. Determine their standard deviations Determine

the coefficient of variation of the return.

B. Which asset is less risky? Explain.