Stocks A and have the following probability distributions of expected future retums: Probability 0.1 (37%) 0.1 0.6 0.1 0.1 Calculate the expected rate of return, Fo, for Stock (A - 11.002.) Do not round Intermediate calculations, Round your drawer to two decimal olun b. Calculate the standard deviation of expected retums, on, for Stock A ( - 19,28%.) Do not round intermediate calculation. Hound your answer to two decimal places. Now calculate the couchant of variation for stock 6. Do not round intermediate calculation, Hound your answer to two decimal place, (14%) 3 10 24 37 0 19 28 38 Is it possible that most investors might regard Stock 6 as being less risky than Stock A 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 risky in a portfolio sense II. I Stock B is more highly correlated with the market than A, then it might have a higher beta than Stock A, and hence be las risky in a portfolio sense III. Ir Stock D is 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. IV 1 Stock B is more highly correlated with the market than then it might have the same betaas Stock A, and hence be just as risky in a portfolio sense. V. If Stock B is less highly correlated with the market than A, then it might have a tower beta than Stock A, and hence be less risky in a portfolio sense Oct C. Assume the risk free rate is 4.5%. What are the Sharpe ratios for Stocks A and B? Do not round Intermediate calculations, Round your answers to four dimar places Stock A Stock B Are these calculations consistent with the information obtained from the coefficient of variation calculations in Part b? 1. In a stand-alone risk sense A is less risky than B. If Stock Iless highly correlated with the market thun A, then it might have a lower botathan Stock And hence be less risky in a portfolio sense. II. In a stand-alone risk sense A is less risky than Bar Stock is less highly correlated with the market than A then it might have a higher beta than Stock A, and thence be more risky in a portfolin sense