Question: 4. (10 marks) Consider the returns on two stocks over a period of five years: Return Return Return Year Stock A Stock B 1

4. (10 marks) Consider the returns on two stocks over a period

4. (10 marks) Consider the returns on two stocks over a period of five years: Return Return Return Year Stock A Stock B 1 14% 11% 2 14 9.5 3 14.25 12 4 14.5 12.5 5 15 17 average return 14% 14% The average return over the five years is the same for both stocks, 14 percent but annual returns differ. Which stock is riskier, Stock A or Stock B? Show your method and explain.

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