Calculate al jazeeras expected return and

Question

The following information pertains to Al Jazeera Steel stock.

Economic state                           Probability           Return

Prosperous                                      20%                    40%

Standard                                          60%                    15%

Decline                                           20%                   (20%)

Instructions:

Calculate Al Jazeera’s expected return and risk.

If investment in Oman Cables is expected to have a return of 10% and calculated risk of 4.5%, which company would be a better investment opportunity; Al Jazeera Steel or Oman Cables?