a. Given the following information, calculate the expected value for Firm C’s EPS. Data for Firms A and B are as follows: E(EPS_A) = $5.10, and σ_A = $3.61; E(EPS_B) = $4.20, and σ_B = $2.96.

b. You are given that σ_C = $4.11. Discuss the relative riskiness of the three firms’ earnings.

PROBABILITY 0.1 0.4 $5.10 4.20 0.2 $8.40 6.90 0.2 $1.80 1.50 0.1 Firm A: EPS, Firm B: EPS, Firm C: EPS, (1.50) (1.20) (2.40) $11.70 9.60 1.35 8.85 5.10 12.60