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Calculate the expected return for stocks

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Reference no: EM132484938

Victor is considering investing in one of two stocks, which have the following probability distributions:

Probability           Stock A                Stock B

0.2                        30%                   40%

0.5                        15%                   20%

0.3                       -10%                     -30%

Question a. Calculate the expected return for Stocks A and B. Express your answers in percent with two decimals.

Question b. Calculate the standard deviation for Stocks A and B. Express your answers in percent with two decimals.

Question c. Which stock is preferred? Why?

Reference no: EM132484938

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