Stocks A and B have the following probability distributions of expected future returns Probability A B 0.4 (6) (279) 0.1 0 0.2 19 0.2 20 25 37 48 a. Calculate the expected rate of retum, o for Stock B (A-9.30.) Do not round intermediate calculations. Round your answer to the decimal places. b. Calculate the standard deviation of expected returns for Stock A(-25.844.) Do not round Intermediate calculations. Round your answer to two decimal places to calculate the coefficient of variation for Et Round your answer to two decimal places Is it possible that most investors might regard Stockebany than Stock A? 1. If Stock Bless highly correlated viththares than then it maht have a higher bata thar stock and hence be more in portfolio sense 11. If Stock is more highly correlated with the market than A then it might have a higher beta than stock and hence beyin portfolio In Stock more highly corrested that than then might have a bata thar stock and hence Day crtfolio IV. If Stockmorenghly correste vith the market than Athen it might have the same buttock And hence but in erfolien . If Stock is less highly correlate with the market than then it might have beathan SA and hence been portfoloses Cheat the baserat - Boot und internaciate calcul und 1. If Stock is less highly correlated with the market than A, then it might have a higher beta than Stock A, and hence be more risk a portfolio sense. 11. 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 a portfolio sense. m. If Stock B is more highly correlated with the market than A. then it might have a lower beta than Stock A, and hence be less risky a portfolio sense. IV. 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 just as risk in a portfolio sense. V. If Stock B is less highly correlated with the market than A then it might have a lower beta than Stock A, and hence be less risky in portfolio sense -Select- c. Assume the rise free rates 3.59. What are the Sharperation for Stocks A and B7 Do not round intermediate calculations. Round your answer to two decimal places. Stock A Stock Are these calculation consistent with the information obtained from the cocient of variation calculations in Part by 1. In stand-alone risk to A sky than estock ass highly correlated with the market than then it might have oor beta than stoc hence belastinen 11. In standalone riskenky than I Stock 2 highly correlated with the market than then it might have highebetathan Stand hence beroes standalone risorse than stock loss highly correlated with the market than than it might have Ter bota Sadece bele ola more than Steckless highly correlated with the market than then it might have higher bets than stock here to see wtrastanderensky than . If Stockmorenghly correlated with the market than then it might have the beta a Stoccand hence best in portfolose Stocks A and B have the following probability distributions of expected future returns Probability A B 0.4 (6) (279) 0.1 0 0.2 19 0.2 20 25 37 48 a. Calculate the expected rate of retum, o for Stock B (A-9.30.) Do not round intermediate calculations. Round your answer to the decimal places. b. Calculate the standard deviation of expected returns for Stock A(-25.844.) Do not round Intermediate calculations. Round your answer to two decimal places to calculate the coefficient of variation for Et Round your answer to two decimal places Is it possible that most investors might regard Stockebany than Stock A? 1. If Stock Bless highly correlated viththares than then it maht have a higher bata thar stock and hence be more in portfolio sense 11. If Stock is more highly correlated with the market than A then it might have a higher beta than stock and hence beyin portfolio In Stock more highly corrested that than then might have a bata thar stock and hence Day crtfolio IV. If Stockmorenghly correste vith the market than Athen it might have the same buttock And hence but in erfolien . If Stock is less highly correlate with the market than then it might have beathan SA and hence been portfoloses Cheat the baserat - Boot und internaciate calcul und 1. If Stock is less highly correlated with the market than A, then it might have a higher beta than Stock A, and hence be more risk a portfolio sense. 11. 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 a portfolio sense. m. If Stock B is more highly correlated with the market than A. then it might have a lower beta than Stock A, and hence be less risky a portfolio sense. IV. 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 just as risk in a portfolio sense. V. If Stock B is less highly correlated with the market than A then it might have a lower beta than Stock A, and hence be less risky in portfolio sense -Select- c. Assume the rise free rates 3.59. What are the Sharperation for Stocks A and B7 Do not round intermediate calculations. Round your answer to two decimal places. Stock A Stock Are these calculation consistent with the information obtained from the cocient of variation calculations in Part by 1. In stand-alone risk to A sky than estock ass highly correlated with the market than then it might have oor beta than stoc hence belastinen 11. In standalone riskenky than I Stock 2 highly correlated with the market than then it might have highebetathan Stand hence beroes standalone risorse than stock loss highly correlated with the market than than it might have Ter bota Sadece bele ola more than Steckless highly correlated with the market than then it might have higher bets than stock here to see wtrastanderensky than . If Stockmorenghly correlated with the market than then it might have the beta a Stoccand hence best in portfolose
