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Stocks A and have the following probability distributions of expected future returns Probability 0.1 0.1 0.0 0:1 0.1 (115) 6 13 22 16 (229) 0

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Stocks A and have the following probability distributions of expected future returns Probability 0.1 0.1 0.0 0:1 0.1 (115) 6 13 22 16 (229) 0 10 25 32 . Calculate the expected rate of return, o, for stock (19.106.) Do not found Intermediate calitations. Round your newer to two ducma 6. Calculate the standard deviation of expected returns, an, for Stock A (on - 15.076.) Do not round intermediate calculations. Round your answer to two decimal places Now calculate the coefficient of variation for Stock 6. Do not round Intermediate calculations. Round your answer to two decimal places ts it possible that most investors might regard stock 8 as being less risky than Stock A? of Stock is less highly correlated with the market than A, then it might have a higher but than Stocks, and hence be mornisky in a potolisen II. Stock is more highly correlated with the market than A, then it might have a higher beathan Stock A, and hence bielenisky in a portfolio TH. If Stock is more highly correlated with the market than A, then it might have a lower beta than Stock A, and hence be less rok in a portfolio sense TV. 1 Stock is more Nohly correlated with the market than A, then it might have the same bute as Stock A, and hence be just as disky in a portfolio sente Vitt Stock 8 w less highly correlated with the market than then it might have a lower beta than Stock A, and hence be less risky in a portfolio senie 6. Assume the vide free rate is 1. What are the Sharperation for Studies A and B? Do not round intermediate calokations. Round your answers to four decimal places Stock A Stock Are these calculations consistent with the information obtained from the coffident of variation calculations in Part 1 in a stand-alone risk sente A is less risky than 8. Stock is less highly correlated with the market than A, then it might have a lower but than Stock A, and hence bless risky in a portfolio sense 11. In a stand-alone risk sense A is less risky than . If Stock it is less highly correlated with the market than A, then it might have higher beta than stock A, and hence de more sky in a portfolio sense III. In stand-alone risk sense A is more than 8. Ir stock is less highly correlated with the market than A, then it might have a lower but the stock A, and bence been sky in a portfolio sense IV. In a stand one risk sense A is more risky than I Stock is less highly correlated with the market than then it might have a higher beatha Stock A, and becebe more risky in a portfolio sense V. In a standalone risk sense A is less risky thuat. If Stock B is more highly correlated with the market than then it might have the same beta as Stock A, and hence bet as risky in a portfolio sense TM 40 20

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