Consider the following stocks with equal probabilities of return: Outcome | Return (Stock A) | Return (Stock B) 1 -5% 2% 2 10% 12% 3 18% 15% Compute the expected returns of stock A and B. Compute the...

Consider the following stocks with equal probabilities of return:

Outcome | Return (Stock A) |  Return (Stock B)

1                     -5%                             2%

2                     10%                           12%

3                     18%                           15%

• Compute the expected returns of stock A and B.


• Compute the total risk and relative risk of stock A and B. Which stock is risky?


• Ignoring the probabilities, what is the total risk and relative risk of stock A and B? Which stock is risky?

Round-off final answers only to two decimal places.