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Consider the following two probability distributions of expected future returns for stocks A and B : Suppose you know that the expected rate of return
Consider the following two probability distributions of expected future returns for stocks A and B : Suppose you know that the expected rate of return for stock A is 9.6% and would like to calculate the expected return for stock. The expected rate of return for stock B is approximately % expected returns for stock A. Hint: Recall that the expected rate of return for stock A is 9.6%. approximately % Using your calculations in the previous parts of the problem, the coefficient of variation of stock B is approximately Hint: Recall that the expected rate of return for stock A is 9.6%. The variance of the expected returns for stock A is approximately while the standard deviation of expected returns for stock A is approximately %. Using your calculations in the previous parts of the problem, the coefficient of variation of stock B is approximately True or False: Investors will always view the stock with a lower coefficient of variation as a "safer" choice when compared to a stock with a coefficient of variation. True False
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