A stock's returns have the following distribution:

Demand for the Company's Products	Probability of This Demand Occurring	Rate of Return If This Demand Occurs
Weak	0.2	(48%)
Below average	0.2	(7)
Average	0.4	11
Above average	0.1	27
Strong	0.1	74
	1.0

Assume the risk-free rate is 2%. Calculate the stock's expected return, standard deviation, coefficient of variation, and Sharpe ratio. Do not round intermediate calculations. Round your answers to two decimal places.

Stock's expected return: _____%

Standard deviation: _____ %

Coefficient of variation: _____

Sharpe ratio: _____

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Stock X has a 9.5% expected return, a beta coefficient of 0.8, and a 35% standard deviation of expected returns. Stock Y has a 13.0% expected return, a beta coefficient of 1.3, and a 20.0% standard deviation. The risk-free rate is 6%, and the market risk premium is 5%.

Calculate each stock's coefficient of variation. Round your answers to two decimal places. Do not round intermediate calculations.

CV_x = ____

CV_y = ____

Which stock is riskier for a diversified investor?

For diversified investors the relevant risk is measured by beta. Therefore, the stock with the lower beta is more risky. Stock X has the lower beta so it is more risky than Stock Y.

For diversified investors the relevant risk is measured by standard deviation of expected returns. Therefore, the stock with the lower standard deviation of expected returns is more risky. Stock Y has the lower standard deviation so it is more risky than Stock X.

For diversified investors the relevant risk is measured by beta. Therefore, the stock with the higher beta is less risky. Stock Y has the higher beta so it is less risky than Stock X.

For diversified investors the relevant risk is measured by beta. Therefore, the stock with the higher beta is more risky. Stock Y has the higher beta so it is more risky than Stock X.

For diversified investors the relevant risk is measured by standard deviation of expected returns. Therefore, the stock with the higher standard deviation of expected returns is more risky. Stock X has the higher standard deviation so it is more risky than Stock Y.

Calculate each stock's required rate of return. Round your answers to two decimal places.

r_x = ____ %

r_y = ____ %

On the basis of the two stocks' expected and required returns, which stock would be more attractive to a diversified investor?

Calculate the required return of a portfolio that has $2,000 invested in Stock X and $10,000 invested in Stock Y. Do not round intermediate calculations. Round your answer to two decimal places. r_p = _____%

If the market risk premium increased to 6%, which of the two stocks would have the larger increase in its required return?

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For a good rating please answer both questions and clearly state the answers, thank you.