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Consider the following two assets with probability of return = P i and return = R i . a. Calculate the expected return for each

Consider the following two assets with probability of return = Pi and return = Ri.

a. Calculate the expected return for each and the standard deviation.

b.Which assetcarries the greatest risk? Why?

Asset A Asset B
Pi Ri Pi Ri
0.40 12.0% 0.20 11.5%
0.50 8.5% 0.50 10.0%
0.10 -2.0% 0.30 0.0%

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