15. You are considering a security with the following possible rates of return:

Probability	Return (%)
0.10	8.5
0.30	12.6
0.40	14.7
0.20	22.3

a. Calculate the expected rate of return.

b. Calculate the standard deviation of the returns.

16. You are considering the three securities listed below.

	Returns
Probability	Stock A	Stock B	Stock C
20%	2%	-3%	5%
50%	10%	8%	8%
30%	15%	20%	12%

a. Calculate the expected return for each security.

b. Calculate the standard deviation of returns for each security.

c. Compare Stock A with Stocks B and C. Is Stock A preferred over the others?

17. Answer the questions below using the following information on stocks A, B, and C.

	A	B	C
Expected Return	13%	13%	10%
Standard Deviation	12%	10%	10%
Beta	1.6	2	0.5

Assume the risk-free rate of return is 4% and the expected market return is 10%

1. Calculate the required return for stocks A, B, and C.
2. Assuming an investor with a well-diversified portfolio, which stock would the investor want to add to his portfolio?
3. Assuming an investor who will invest all of his money into one security, which stock will the investor choose?