2. RISKS & RETURNS: Open with Google Docs A close family friend has approached you to help her determine which of the tw

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2 Risks Returns Open With Google Docs A Close Family Friend Has Approached You To Help Her Determine Which Of The Tw 1 (147.47 KiB) Viewed 31 times

2. RISKS & RETURNS: Open with Google Docs A close family friend has approached you to help her determine which of the two common stocks she should invest in. Common Stock A Return 11% 15% 19% Probability 0.3 0.4 0.3 Common Stock B Probability Return 0.2 -5% 0.3 6% 0.3 14% 0.2 22% Required: a) Calculate the expected returns of stock A (3 marks) b) Determine the risk (standard deviation) and return of stock A (4 marks) (5 marks) c) Calculate the expected returns of stock B d) Determine the risk (standard deviation) and return of stock B (6 marks) e) Which investment should your friend invest in? (3 marks) f) Jenny has decided that she will invest her $100,000 savings in stocks as follows: