Based on the following information:  (Interpretation word limit 200 to 250 words)

		Rate of return if state occurs
State of Economy	Probability of state of economy	Stock A	Stock B	Stock C
Recession	33.33%	7%	-2%	5%
Normal	33.33%	10%	0%	11%
Boom	33.33%	15%	3%	20%

 

a) Which investment has the highest expected return?

b) Which investment has the highest total risk?

Answer rating: 100% (QA)

Answer a To find the investment with the highest expected return we calculate the weighted average r... View the full answer