Question: Problem 8-07 You are considering two stocks and have determined the following information: Stock A Return 26% Probability of the Return 35% 60 Stock B
Problem 8-07 You are considering two stocks and have determined the following information: Stock A Return 26% Probability of the Return 35% 60 Stock B Return 30 % Probability of the Return 10 % 19 30 60 a. 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: Stock A has the higher expected return. b. 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: Stock B i s riskier. C. Given your answers to the two previous questions, what stock is preferred? Stock is preferred
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