Find the expected return for both stocks

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Reference no: EM131523250

You are considering an investment in one of two common stocks. The standard deviation of returns for assets A & B respectively are 1.73% and 5.49%.

            Common Stock A                     Common Stock B

Probability       Return                          Probability       Return

.10                15.0%                    .20              4.0%

.20                11.5%                    .45            11.0%

.40                10.0%                    .10            25.0%

.30                  9.0%                    .25              9.0%

1) Find the expected return for both stocks.

2) Based on risk and return, which investment is better? Explain why you made this choice.

Reference no: EM131523250

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