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Excel Online Structured Activity: Evaluating risk and return Stock X has a 9.5% expected return, a beta coefficient of 0.8, and a 40% standard deviation

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Excel Online Structured Activity: Evaluating risk and return Stock X has a 9.5% expected return, a beta coefficient of 0.8, and a 40% standard deviation of expected returns, 5 tock y has a 12.5% expected return, a beta coefficient of 1.2, and a 25.0% standard deviation. The risk.free rate is 6%, and the market risk premium is 5%. The data has been colected in the Microsoft Excel Online file below. 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. CVx= CVy= b. Which stock is riskier for a diversified investor? 1. For diversified investors the relevant risk is measured by beta. Therefore, the stock with the higher beta is mote risky. Stock Y has the nigher beta so it is mose risky than Stock X. It. For diversified investors the relevant risk is measured by standard deviation of expected returns, Therefore, the stock with the higher standard deviation of expected returns is more rishy. Stock X has the higher standard deviation so it is mere ilsky than 5 fock y, III. For diversified investors the relevant ritk is measured by beta. Therefore, the stock with the lower beta is more ritky, 5 tock X has the lower beta so it is III. For diversified investors the relevant risk is measur ed by beta. Therefore, the stock with the lower beta is more risky. Stock X has the lower beta so it is more risky than 5 tock Y. IN. For diversifled investors the relevant risk is measured by standard deviation of expected returns. Therefore, the stock with the lower standard deviation of expected returns is more risky. Stock Y has the lower standard deviation so it is more risky than 5 tock X. V. For diversified investors the relevant risk is measured by beta. Therefore, the stock with the higher beta is less risky. 5 totk Y has the higher beta so it is less risky than Stock: X. c. Calculate each stock's required rate of retum. Round your answers to two decimal places. rx= ry= d. On the basis of the two stocks' expected and required returns, which stock would be more attractive to a diversilied investor? e. Calculate the required retum of a portfolio that has $,000 invested in 5 tock X and $7,500 invested in Stock Y. Do not round intermediate calculations. Round your answer to two decimal places. 1. If the market risk bremium increased to 6%, which of the two stocks would have the larger increase in its required return

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