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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%
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% | 13% |
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?
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