b. Which stock is riskier for a diversified investor? 1. 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 nisker, 5 tock Y has the lower standard deviation so it is riskier than 5 tock X, 17. For divenified investors the relevant tikk is measured by beta. Therefore, the stock with the higher beta is iess risky. Stock Y has the higher beta so it is less. fiky that Stock x. Itt. For diversified investors the relevant risk is measured by beta. Therefore, the stock with the higher beta is risker. Stock y has the higher beta so it is riskier than stock x : IV. For diversified imvestors the reievant risk is measured by standard deviation of expected returns. Therefore, the stock with the higher standard deviatien of expected recturns is riskier. Stock X has the higher standard deviation so it is risker than Stock Y. V. For divers fied investors the relevant nisk is measured by beta. Therefore, the stock with the fower beta is riskier, Stock X has the lower beta so it is riskier than Stock y, Stock y; c. Calculate each stocks required rate of return, Round your answers to one decimal place. d. On the basis of the two stocks' expected and required returns, which stock would be more attractive to a diversified investor? e. Calcalate the required retum of a portfolio that has $5,000 invested in 5 tock X and $2,000 irvested in 5 tock Y, Do not round intermediate calculations, Round your answer to two decimal ploces. rp= 1. If the market risk premium increased to 6%, which of the two stocks would hove the iarger increase in its reaured return