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Summerville Inc. is considering an investment in one of two common stocks. Economy State COMMON STOCK A COMMON STOCK B PROBABILITY RETURN PROBABILITY RETURN Recession

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Summerville Inc. is considering an investment in one of two common stocks. Economy State COMMON STOCK A COMMON STOCK B PROBABILITY RETURN PROBABILITY RETURN Recession 0.25 11% 0.1 -6% Recovery 0.5 16% 0.4 5% Expansion 0.25 19% 0.4 14% Boom 0.1 22% Given the information below, please compute a. Expected return for stock A and stock B b. Risk for stock A and stock B c. Using the expected return and risk, please determine which one is a better investment for a risk-averse investor

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