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1. The following probability distributions of returns for two stocks have been estimated: Probability 0.25 Stock X Stock Y 3% 6% 0.35 8% 3%

1. The following probability distributions of returns for two stocks have been estimated: Probability 0.25 Stock X Stock Y 3% 6% 0.35 8% 3% 0.40 6% 1% What is the coefficient of variation for the stock that is more risky relative to its return (use the coefficient of variation to rank) and explain why?

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