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Excel Online Structured Activity: Evaluating risk and return Open the spreadsheet and perform the required analysis to answer the questions below. Open spreadsheet a .
Excel Online Structured Activity: Evaluating risk and return
Open the spreadsheet and perform the required analysis to answer the questions below.
Open spreadsheet
a Calculate each stock's coefficient of variation. Round your answers to two decimal places. Do not round intermediate calculations.
b Which stock is riskier for a diversified investor?
risky than Stock X
more risky than Stock
expected returns is more risky. Stock has the higher standard deviation so it is more risky than Stock
more risky than Stock Y
expected returns is more risky. Stock has the lower standard deviation so it is more risky than Stock
c Calculate each stock's required rate of return. Round your answers to two decimal places.
d On the basis of the two stocks' expected and required returns, which stock would be more attractive to a diversified investor?
your answer to two decimal places.
f If the market risk premium increased to which of the two stocks would have the larger increase in its required return?Stock X has a expected return, a beta coefficient of and a standard deviation of expected returns. Stock Y has a expected return, a beta coefficient of and a standard deviation. The riskfree rate is and the market risk premium is The data has been collected in the Microsoft Excel Online file below. Open the spreadsheet and perform the required analysis to answer the questions below.
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