Stocks A and B have the following probability distributions of expected future retures Probability A B 0.1 (5%) (30%) 0.1 3 0 0.6 13 22 0.1 21 25 0.1 37 48 a. Calculate the expected rate of return, rn, for Stock B (FA 13.40%.) Do not round intermediate calculations. Round your answer to two decimal places " b. Calculate the standard deviation of expected returns, GA, for Stock A ( 19.16%.) Do not round intermediate calculations. Round your answer to two decimal places. Now calculate the coefficient of variation for Stock B. Do not round intermediete calculations. Round your asswer to two decimal places Is it possible that most investors might regard Stock 8 es being less risky than Stock A 1. 1. 1. If Stock B is less highly correlated with the market then A, then it might have a lower beta than Stock A, and hence be less risky in a portfolio sense. If Stock B is less highly correlated with the market than A, then it might have a higher beta then Stock A, and hence be more risky in a portfolio sense. If Stock B is more highly correlated with the market than A, then it might have a higher beta than Stock A, and hence be less risky in a portfolio sense 1 Stock 8 more highly correlated with the market than A, then it might have a lower beta than Stock A, and hence be less risky in a portfolio sense. v. if Stock B is more highly correlated with the market than A, then it might have the same bela as Stock A, and hence be just as risky in a portfossense TV. Assume the risk-free rate is 2.5% What are the Sharpe ratios for Stocks A and B? Do not round intermediate calculations. Round your answers to four decimal places Stock A Stock B Are these calculations consistent with the information obtained from the coefficient of variation calculations in Part 1. In a stand-alone risk sense A is less risky than B. If Stock B is more highly correlated with the market than A, then it might have the same beta as Stock A, and hence be put as risky in a portfele sanse 11. In a stand-alone risk sense A is less risky then B. If Stock B is lese highly correlated with the market than A. then might have a lower beta than Stock A, and hence be less sky in a perfoils senas tis less highly cerreeted with the market than A, then might have a higher beta than Stock A, and hence be more raky 11. In a stand-sinne risk sense A is less risky then risky a pero sense IV. In a stand-alone riak sense A is more raky than B. If Stock 8 is less highly comelated with the market than A, then a might have a lower beta then Stock A, and hence be i In a stand-alone nik sense A is more raky than B. If Stack B is less highly correlated with the market than A, then it might heve a higher bets than stack A, and he be more risky na partfoto sense