Your stockbroker has called to tell you about two stocks: Facebook, Inc. $($FB$)$

and Tesla, Inc. $($TSLA$).$ She tells you that FB is selling for $$190\mathrm{.}00$ per share and

that she expects the price in one year to be $$240\mathrm{.}00.$ TSLA is selling for $$310\mathrm{.}00$

per share and she expects the price in one year to be $$330\mathrm{.}00.$ The expected

return on FB has a standard deviation of $15$ percent, while the expected return

on TSLA has a standard deviation of $35$ percent. The market risk premium for

the S & $P500$ has averaged $6\mathrm{.}5$ percent. The beta for $FB$ is $1\mathrm{.}28$ and the beta

for TSLA is $\mathrm{.}32.$ The $10-$year Treasury bond rate is currently $1\mathrm{.}80\%.$ Neither FB

nor TSLA pays a cash dividend.

Required:

a$.$ Determine the probability for each stock that you would earn a positive return.

b$.$ Determine the probability for each stock that you would earn less than your required

rate of return.

c$.$ Explain why you would or would not buy either or both of the two stocks.