Michael is trying to evaluate the following three assets for future investment considerations:

State Probability Asset A Asset B Asset C

1 0.10 14% 18% 6%

2 0.15 10% 15% 5%

3 0.30 6% 8% 4%

4 0.25 3% -2% 3%

5 0.20 -2% -12% 2%

a. Determine the expected return of each asset.

b. Determine the standard deviation of each asset.

c. Determine the Sharpe ratio of each asset (assuming the risk-free rate is 3.5%).

d. Based on (c), which of the asset will be considered as the best investment? Explain.

Please show work. Thank you.