6. Calculate the expected rate of return, Stock B(PA=15;70\% .) Do not round Intermediate calculationsRound your answer to two dedmal places

Module 5 Homework Stocks A and B have the following probability distributions of expected future returns: 0 Probability 0.1 (5%) (219) 0.1 3 0.5 16 21 0.2 23 30 0.1 33 40 . Calculate the expected rate of return, in, for Stock B(A - 15.70%.) Do not round intermediate calculations. Round your answer to two decimal places b. Calculate the standard deviation of expected returns, as for Stock A (0- 16.31%.) Do not round Intermediate calculations. Round your answer to two decimal places Now calculate the coefficient of variation for Stock 6. Do not round Intermediate calculation, Round your answer to two decimal places Is it possible that most investors might regard Stock B as being less risky than Stock A? 1. If Stock is more highly correlated with the market than A then it might have a lower beta than Stock A, and hence be less risky in a portfolio sense 11. If Stock is more highly correlated with the market than A than it might have the same beta a Stock A, and hence be just as risky in a portfolio sense III. I Stock is less highly correlated with the market than then it might have a lower but than Stock A, and hence be less risky in a portfolio sense IV. 11 Stock is less highly correlated with the market than then it might have a higher beathan Stock A, and hence be more risky in a portfolio sense V. If Stock is more highly correlated with the market than A then it might have a higher beta than Stock A, and hence be less risky in a portfolio sense. C. Assume the risk-free rate is 2.5%. What are the Sharpe ratios for Stocks A and B? Do not found intermediate calculations, Round your answers to four decimal places Stock A Module 5 Homework IV. If Stock Bis less highly correlated with the market than A, then it might have a higher beta than Stock A, and hence be more risky in a portfolio sense V. I Stock B is more highly correlated with the market than A then it might have a higher beta than Stock A, and hence be less risky in a portfolio sense. c. Assume the risk-free rate is 2.5%. What are the Sharpe ratios for Stocks A and B? Do not round intermediate calculations. Round your answers to four decimal places. A-Z Stock A Stock : Are these calculations consistent with the information obtained from the coefficient of variation calculations in Port b? 1. In a stand-alone risk sense A is less risky than B. If Stock B is less highly correlated with the market than A, then it might have a higher beta than Stock A, and hence be more risky in a portfolio sense 11. In a stand-alone risk sense A is more risky than B. 1 Stock B is less highly correlated with the market than A, then it might have a lower beta than stocy, and hence be less risky in a portfolio sense. II. In a stand-alone risk sense A is more risky than B. 1 Stock B is less ghly correlated with the market than then it might have a higher beta than Stock A, and hence be more risk in a portfolio sense IV. In a stand-alone risk sense A is less risky than B. If Stock B is more highly correlated with the market than A, then it might have the same beta as Stock A, and V. In a standalone risk sense A is less risky than B. If Stock B is less highly correlated with the market than A, then it might have a lower beta than Stock A, and hence be less risky in a portfolio sense N hence be just as risky in a portfolio sense Grade It Now Save & Continue Continue without saving