Question

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

Share A		Share B
Probability	Return	Probability	Return
0.35	13%	0.15	−4​%
0.30	16​%	0.35	55​%
0.35	20​%	0.35	13​%
		0.15	20%

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

____%.

​(Round to two decimal​ places.)The standard deviation of share A is

____%.

​(Round to two decimal​ places.)b.  The expected rate of return for share B is

_____​%.

​(Round to two decimal​ places.)The standard deviation for share B is

_____%.

​(Round to two decimal​ places.)

c.  Based on the risk​ (as measured by the standard​ deviation) and return of each​ share, which investment is​ better?  ​

Answer 1