(Expected rate of return and risk) Syntex, Inc is considering an investment in one of two common stocks. Given the information that follows, which investment is better, based on the risk (as measured by the standard deviation) and return? Common Stock A Probability 0.35 0.30 0.35 Return 12% 14% 20% Common Stock B Probability 0.25 0.25 0.25 0.25 (Click on the icon in order to copy its contents into a spreadsheet.) Return -7% 8% 15% 23%

Given the information in the table, what is the expected rate of return for stock A?

What is the standard deviation of stock A?

What is the expected rate of return for stock B?

Based on the risk (as measured by the standard deviation) and return of each stock which investment is better?