a)Compute the expected return of each stock.

CPInc.:

BKInc.:

b) Compute the total risk () of each stock.

CPInc.:

BKInc.:

c) Compute the coefficient of variation of each stock. Evaluate the results.

CPInc.:

BKInc.:

Evaluation:

Economy Probability Recession Below Average Average Above Average Boom Expected Returns CPInc. BKInc. 0,15 -0,62 0,2 -0,22 0,3 0,12 0,2 0,22 0,15 0,42 -0,42 -0,12 0,22 0,32 0,52