bind Tap-Cengag ndex html2mbld-6286328nbNodeld- 231390412 560630334534630449872346938elSEN 9781337299 hapter 08 End-of-Chapter Problems 11 PM ED Problem 8-6 O Expected returns Stocks A and B have the following probability distributions of expected future returns: -27% 0.2 0.2 0.3 0.2 0.1 12 20 a. Calculate the expected rate of return. r. for Stock B (rA-11.20%.) Do not rund intermediate calculations. Round your answer to two decinal places. b. Calculate the standard deviation of expected returns ou for Stock A o-20.90% Do not round ite nedate calculations R nd your ans er to t d Now calculate the coefficient of variation for Stock Round your answer to two decimal places. d. is it possible that mest investors might regard Stock 8 as being less risky than Stock A 1. It Stock B 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 portrolio sense. 11. If Stock B is more highly correlated with the market than A, then it might have the same beta as Stock A, and hence be just as risky in a portfolio sense IIL. If Stock 8 is less highily correlated with the market than a, then it might have a lower beta than Stock A, and hence be less risky in a portfolo sense. TV. 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 porttolio serse. V. If 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 pertfolio sense