1. Suppose you are the money manager of a $4 million investment fund. The fund consists of four stocks with the following investments and betas:

Probability	A	B
0.1	- 10%	-35%
0.2	2	0
0.4	12	20
0.2	20	25
0.1	38	45

1. Calculate the expected rate of return, r_B, for Stock Y (r_A= 12%)
2. Calculate the standard deviation of expected returns, A, for Stock A (b= 20.35%)
3. Now calculate the coefficient of variation for Stock B. Is it possible that most investors will regard Stock B as being less risky than Stock A? Explain.

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