2. Answer both Part(a) and Part(b) below (a) Roenfeld Corp believes the following probability distribution exists for its stock. What is the coefficient of variation on the company's stock? [10 points] State of the Economy Boom Normal Recession Probability of State Occurring 0.45 0.50 0.05 Stock's Expected Return 25% 15% 5% (0) Mikkelson Corporation's stock had a required return of 11.75% last year, when the risk- free rate was 5.50% and the market risk premium was 4.75%. Then an increase in investor risk aversion caused the market risk premium to rise by 2%. The risk-free rate and the firm's beta remain unchanged. What is the company's new required rate of return? (Hint: First calculate the beta, then find the required return. [10 points)