Answer to Question #51675 in Finance for abdulla sabit

Question

Stock X and Y have the following probability distributions of expected future returns:

Probability ------- X -------- Y
0.15 -10% -20%
0.20 2 0
0.30 10 20
0.20 20 25
0.15 30 40

1)Calculate the expected rate of return for both stocks.
2)Calculate the standard deviation for both stocks.
3)Which stock is risky and why?