Question
Syntex, Inc. is considering an investment in one of two common stocks. Given the information that follows, which investment is better, based on the risk
Syntex, Inc. is considering an investment in one of two common stocks. Given the information that follows, which investment is better, based on the risk (as measured by the standard deviation) and return?
Common Stock A | Common Stock B | |||
Probability | Return | Probability | Return | |
0.35 | 10% | 0.25 | −7% | |
0.30 | 14% | 0.25 | 5% | |
0.35 | 18% | 0.25 | 15% | |
0.25 | 23% |
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Financial Management Principles and Applications
Authors: Sheridan Titman, Arthur Keown, John Martin
12th edition
133423824, 978-0133423822
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