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X. has a 9.0% expected return, a beta coefficient of 0.7, and a 30% standard deviation of expected returns, Stock y has a 12.0% expected

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X. has a 9.0% expected return, a beta coefficient of 0.7, and a 30% standard deviation of expected returns, Stock y has a 12.0% expected return, a beta coefficient of 1.1, and 1% standard deviation. The risk-free rate is 6%, and the market risk premium is 5%. a. Calculate each stock's coefficient of variation. Do not round intermediate calculations. Round your answers to two decimal placos. CVy=CVy= b. Which stock is riskier for a diversified investor? 1. For diversified investors the relevant risk is measured by beta. Therefore, the stock with the lower beta is riskler. Stock X has the lower beta so it is riskler than Stock Yf II. For diversified investors the relevant risk is measured by standard dewation of expected returns. Therefore, the stock: with the lower standard deviation of expected returns is riskler. Stock Y has the lower standard deviation so it is riskier than Stock X. IIt. For diversified investors the relevant risk is measured by beta. Therefore, the stock with the higher beta is less risky. Stock Y has the higher beta so it is less riaky than Stock X, IV. For diversifed investors the reievant risk is measured by beta. Therefore, the stock with the higher beta is riskier. Stock Y has the higher bet so it is riskier than Stock X. V. For diversified investors the relevant risk is measured by standard deviation of expected returns. Therefore, the stock with the higher standard deviation of expected returns is riskier. Stock X has the higher standard deviation so it is riskier than Stock Y. c. Calculate each stock's required rate of return. Round your answers to one decimal place. d. On the basis of the two stocks' expected and reevired returns, which stock would be more attractive to a diversified investor? 6. Caiculate the required retum of a portfolio that has $6,000 invested in 5 tock X and $2,000 invested in Stock Y. Do not round intermed ane calculatians. Round your answer to two decimal pibces. f. If the markes risk premium incressed to 6%, which of the fwo stocks would have the farger increase in its required return

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