You have researched the common stock of two companies (A and B) and have compiled the following information:
COMPANY A COMPANY B
Probability Return Probability Return
0.20 -2% 0.10 4%
0.50 18% 0.30 6%
0.30 27% 0.40 10%
0.20 15%
Calculate the expected return, standard deviation (σ), and the coefficient of variation (CV) for each stock and, based on the CV, which stock should you invest in? Briefly explain.