Stock has a 9.0% expected retum, a beta coctficient of 0.7, 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 20% standard deviation. The risk.free rate is 6%, and the market risk premum is 5%. a. Calculate each stock's coefficient of yanation. Do not round intermediate calculations. Round your answers to two decimal places. CVx=CVy= b. Which stivck is risker for a divetsulied investor? 1. For diversified ifivestors the relevant risk is measured by beta. Therefore, the stock wath the higher beta is riskeer, stock Y has the higher beta so it is riskier than . Stock x. 11. For diveisified investoes the relevant risk is measured by standard deviation of expected returns. Therefore, the stock with the higher standard deviation in expected returns is riskiec, Stock X has the tigher standard deviation sa it is riskier than 5 tock Y. 111. For diversified investees the relevant risk is measured by beta. Therefore, the stock with the lower beta is riskier. 5 tock X has the lower beta so it is riskiner than Stock Y1 IV. Foe diversified ifvestors the relevant nsk is measured by saandatd deviation of expected retiams, Therefore, the stock with the lower standaed deviation of expected teturns is rinker, 5tock Y has the lower standard devistion so it is rishoer than 5 tock X. W. For deversibed investors the relevant risk is measured by heta. Therefore, the stock with the higher beta is less risky. 5 teck Y has the higher beta so it is less risky than steck x. E. Cabiculte each socks required rate of retum. flound yout answers to one decimal place fx=1ty=2 d. On the basis of the two stode' expected and tequired returns, which steck would tie more atractive to a diversilied iriveaturt? miswer to fwo decinil blacen. rp= I If the niaket rik permem increased to the, nhich of the two stocks wouls have the larger increave in ats required return