Tim purchased ABC stock at $40 per share and XYZ stock at $35 per share on the same day in 2015. Exactly 6 months later, the ABC stock is worth $42.00 per share and has not paid a dividend while the XYZ stock is worth $36 per share and has paid 2 quarterly dividends of $0.50 each. 

(i) Compute the holding period returns for these stocks for the six-month period.  

(ii) If both stocks are of the same risk which stock should Tim avoid investing in? Explain why