The following table gives the expected returns and probabilities of various states of nature for securities A and B:

State Probability Return on Asset A Return on Asset B

Boom 0.10 45% 30%

Normal 0.60 20% 25%

Recession 0.30 -10% -5%

Determine:

i. the expected return on each stock.

ii. the standard deviation of returns of each stock.

iii. the coefficient of variation for each stock.

iv. which stock is more volatile. Why