Discuss differences in mean

returns relative to the

standard deviation of the
return for each stock.

Stock C

Probability

0.35

Probability

0.35

0.3

0.3

0.25

0.25

0.2

0.2

0.15

0.15

0.1

0.1

0.05

0.05

-0.1

0.1

0.25

Possible rate of return

Stock D

-0.6 -0.3 -0.1 0.2 0.4

Possible rate of return

0.8