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ou are considering two stocks and have determined the following information: Stock A Return Probability of the Return 18 % 25 % 14 40 7

ou are considering two stocks and have determined the following information:

Stock A Return Probability of the Return
18 % 25 %
14 40
7 35

Stock B Return Probability of the Return
20 % 20 %
14 45
6 35

  1. Which of the two stocks has the higher expected return? Round your answers to two decimal places.

    The return on Stock A: %

    The return on Stock B: %

    -Select-Stock AStock BItem 3 has the higher expected return.

  2. Which stock is riskier? Do not round intermediate calculations. Round your answers to two decimal places.

    Standard deviation of Stock A:

    Standard deviation of Stock B:

    -Select-Stock AStock BItem 6 is riskier.

  3. Given your answers to the two previous questions, what stock is preferred?

    -Select-Stock AStock BItem 7 is preferred.

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