Karen, as an investor, is considering investing in the stock of one of the following two companies, Minprice Co. and Savelot Co. The distributions of the annual stock return of these two stocks in the coming year depending on the economic condition are as follows.

Economy State	Probability	Minprice Return	Savelot Return
Boom	30%	11%	9%
Normal	40%	6%	5%
Recession	30%	-2%	-12%

Required:

a) Can we decide which stock to invest based on the comparison of expected return and volatility (standard deviation) across these two stocks? Show your calculations. Are these statistics helpful for us to make the investment decision? Discuss. (6 marks)