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Question No. 3: (15marks) Consider the following two companies and their forecasted returns for the upcoming year: Outcome 1 Probability Return Company A 100% 8%

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Question No. 3: (15marks) Consider the following two companies and their forecasted returns for the upcoming year: Outcome 1 Probability Return Company A 100% 8% Company B 50% 12.5% Outcome 2 Probability Return 50% 5.5% 1. What is the standard deviation of the returns on each company's stock (Company A, and B) (write all formulas) (12 marks). 2- Of these two stocks, which is riskier? Justify your answer (3 marks). Company A Company B Re Company is riskier because

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