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You are considering purchasing two stocks with the following possible returns and probabilities of occurrence: Investment A Return Probability of Occurrence -5% 20% 15 40

You are considering purchasing two stocks with the following possible returns and probabilities of occurrence:

Investment A Return Probability of Occurrence
-5% 20%
15 40
20 30
30 10

Investment B Return Probability of Occurrence
-5% 20%
5 40
10 30
23 10

Compare the expected returns and risk (as measured by the standard deviations) of each investment.

Investments Expected Returns Standard Deviations (to three decimal places)
A % %
B % %

Which investment offers the higher expected return? -Select-The expected returns are the sameA has greater expected return then BB has greater expected return then AItem 5 .

Which investment is riskier? -Select-The risks are the sameA is less riskyB is less riskyItem 6 .

Compare their relative risks by computing the coefficient of variation. Round your answers to three decimal places.

Investments Coefficient of Variation
A
B

-Select-The risks per unit of return are the sameA is less risky per unit of returnB is less risky per unit of returnItem 9 .

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