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Over the last five years, the following returns have been experienced by Firm A and Firm B. a. b. Firm A (% pa) Firm

Over the last five years, the following returns have been experienced by Firm A and Firm B. a. b. Firm A (% pa) Firm B (% pa) 1995 5.0 12.0 1996 8.9 10.7 1997 12.0 5.0 1998 12.5 16.6 1999 13 15.3 Calculate the expected returns, variances and standard deviations for both Firm A and Firm B. If you could only invest in either Firm A or Firm B, which one would you choose? State your reasons.

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