Question

​(Expected rate of return and​ risk) ​ Syntex, Inc. is considering an investment in one of...

​(Expected rate of return and​ risk) ​ Syntex, Inc. is considering an investment in one of two common stocks. Given the information that​ follows, which investment is​ better, based on the risk​ (as measured by the standard​ deviation) and​ return?

Common Stock A             

Common Stock B             

Probability

Return

Probability

Return

0.20

13​%

0.25

−4​%

0.60

16​%

0.25

8​%

0.20

18​%

0.25

15​%

0.25

23​%

a. Given the information in the​ table, the expected rate of return for stock A is %?

b. Given the information in the​ table, the expected rate of return for stock B is %?

c. Given the information in the​ table, the Standard Deviation for Stock A is %?

d. Given the information in the​ table, the Standard Deviation for Stock B is %?

​(Round to two decimal​ places.)

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