Question

You are considering two stocks and have determined the following information:

Stock A Return Probability of the Return 30 % 10 % 15 50 13 40

Stock B Return Probability of the Return 34 % 25 % 17 15 6 60

Which of the two stocks has the higher expected return? Round your answers to two decimal places.

The return on Stock A: 15.7 %

The return on Stock B: 14.65 % Stock A has the higher expected return.

Which stock is riskier? Do not round intermediate calculations.

Round your answers to two decimal places. Standard deviation of Stock A: Standard deviation of Stock B: -Select- is riskier. Given your answers to the two previous questions, what stock is preferred? -Select- is preferred.

Answer 1