Question 8 8 pts Stock X has a 10.0% expected return, a beta coefficient of 0.9, and a 40% standard deviation of expected retums. Stock Y has a 12.0% expected retum, a beta coefficient of 1.1. and a 20% standard deviation. The risk-free rate is 6%, and the market risk premium is 5% 1) Calculate each stocks coefficient of variation. Do not round intermediate calculations. Round your answers to two decimal places CVX [Select] Cvy- Seled Which stock is riskier for a diversified investor? S For diversified investors the relevant risk and by standind deviation of expected retums Therefore, the stock with the lower standed deviation of expected mums is rickier Stock Yus the lower standard deviation so tries 11. For divenified investors the debet Theels the stock with the $ T 9 R F T G 2 24 V B Y H 47 N DGLP 0 B L 1 M 0 0 K L FTE A A 85 Which stock is riskier for a diversified investor? [Select] 1. For diversified investors the relevant risk is measured by standard deviation of expected returns Therefore, the stock with the lower standard deviation of expected returns is riskier. Stock Y has the lower standard deviation so it is riskier than Stock X For diversified investors the relevant risk is measured by beta. Therefore, the stock with the higher beta is less risky. Stock Y has the higher beta so it is less risky than Stock X For diversified investors the relevant risk is memured by beta. Therefore, the stock with the higher beta is riskier. Stock Y has the higher beta so it is riskier than Stock X IV. For diversihed investors the relevant risk is measured by standard deviation of expected returns Therefore, the stock with the higher standard deviation of expected returns is riskier Stock X has thir higher standard deviation so it is riskier than Stock Y V. For diversified investors the relevant risk is measured by beta. Therefore, the stock with the lower beta is riskier Stock X has the lower beta so it is riskier than Stock Y 3 Calculate each stock's required rate of retum Round your answers to one decimal place Rx-Sel Ry Seed D & D 4 On the basis of the two stodes expected and e which stock would be more attractive DOAL 27. 47 $ 4 56 A S 6 R T Y LL F G H A 1910 931 B 800 0 6 9 00 1 O P J K V B N M 7 A Ry 4) [Select] On the basis of the two stocks' expected and required returns, which stock would be more attractive to a diversified investor? [Select] 5) Calculate the required return of a portfolio that has $7,500 invested in Stock X and $2,500 invested in Stock Y. Do not round intermediate calculations. Round your answer to two decimal places. [Select] 6) If the market risk premium increased to 6%, which of the two stocks would have the larger indrease in its required return? [Select]