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(Expected rate of return and risk Summerville Inc. is considering an investment in one of two common stocks. Given the information in the popup window:,

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(Expected rate of return and risk Summerville Inc. is considering an investment in one of two common stocks. Given the information in the popup window:, which investment is better, based on the risk (as measured by the standard deviation) and return of each? a. The expected rate of return for Stock A is %. (Round to two decimal places) The expected rate of return for Stock B is %. (Round to two decimal places) b. The standard deviation for Stock A is %. (Round to two decimal places) The standard deviation for Stock B is %. (Round to two decimal places) c. Based on the risk (as measured by the standard deviation) and return of each stock, which investment is better? (Select the best choice below.) O A. Stock A is better because it has a higher expected rate of return with less risk. O B. Stock B is better because it has a lower expected rate of return with more risk. 1 Data Table COMMON STOCK A COMMON STOCK B PROBABILITY 0.30 0.40 0.30 RETURN 12% 14% 18% PROBABILITY 0.15 0.35 0.35 0.15 RETURN -6% 7% 16% 20% Click to se (Click on the icon located on the top-right comer of the data table above in order to

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