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Stocks A and B have the following probability distributions of expected future returns: Probability A B 0.1 (13 %) (39 %) 0.1 3 0 0.6

Stocks A and B have the following probability distributions of expected future returns:

Probability A B
0.1 (13 %) (39 %)
0.1 3 0
0.6 16 23
0.1 19 29
0.1 32 43
  1. Calculate the expected rate of return, , for Stock B ( = 13.70%.) Do not round intermediate calculations. Round your answer to two decimal places.

%

  1. Calculate the standard deviation of expected returns, A, for Stock A (B = 21.12%.) Do not round intermediate calculations. Round your answer to two decimal places.

%

Now calculate the coefficient of variation for Stock B. Do not round intermediate calculations. Round your answer to two decimal places

Assume the risk-free rate is 1.5%. 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:

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