You are considering the three securities listed below.
Returns
Probability Stock A Stock B Stock C
20% 2% -3% 5%
50% 10% 8% 8%
30% 15% 20% 12%
a. Calculate the expected return for each security.
b. Calculate the standard deviation of returns for each security.
c. Compare Stock A with Stocks B and C. Is Stock A preferred over the others?