Click here to read the eBook: Stand Alone Risk EXPECTED RETURNS Stocks A and B have the following probability distributions of expected future returns: Probability A B 0.1 (14%) (26%) 0.2 3 0 0.3 16 19 0.3 24 30 0.1 29 38 a. Calculate the expected rate of return, ro, for Stock B (A - 14.10%.) Do not round intermediate calculations. Round your answer to two decimal places. 15.9 % b. Calculate the standard deviation of expected returns, on, for Stock A (oy - 18,37%.) Do not round intermediate calculations. Round your answer to two decimal places % c. Now calculate the coefficient of variation for Stock B. Round your answer to two decimal places. d. Is it possible that most investors might regard Stock B as being less risky than Stock A? 1. 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 portfolio sense. 11. If 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 portfolio sense. III. 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. IV. 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. V. 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. -Select- Check My Work (1 remaining)