8-6 Expected Return, Stocks A and B have the following probability distributions of expected future returns

8-6 EXPECTED RETURNS Stocks A and B have the following probability distributions of expected future returns: Probability A B 0.1 (10%) (35%) 0.2 2 0 0.4 12 20 0.2 20 25 0.1 38 45 a. Calculate the expected rate of return, 3, for Stock B (%A = 12%). b. Calculate the standard deviation of expected retums, 0A, for Stock A (0'3 = 20.35%). Now calculate the coefficient of variation for Stock B. Is it possible that most investors willregardStockBasbeinglessriskythanStockA?Explain