# Question: Stocks X and Y have the following probability distributions of

Stocks X and Y have the following probability distributions of expected future returns:

a. Calculate the expected rate of return for Stock Y, rY (rX = 12%).

b. Calculate the standard deviation of expected returns for Stock X(σY = 20.35%). Also, calculate the coefficient of variation for Stock Y. Is it possible that most investors might regard Stock Y as being less risky than Stock X?Explain.

a. Calculate the expected rate of return for Stock Y, rY (rX = 12%).

b. Calculate the standard deviation of expected returns for Stock X(σY = 20.35%). Also, calculate the coefficient of variation for Stock Y. Is it possible that most investors might regard Stock Y as being less risky than Stock X?Explain.

## Answer to relevant Questions

Stocks R and S have the following probability distributions of returns:a. Calculate the expected return for each stock.b. Calculate the expected return of a portfolio consisting of 50 percent of each stock.c. Calculate the ...The McAlhany Investment Fund has total capital of $500 million invested in five stocks:The current risk-free rate is 8 percent. Market returns have the following estimated probability distribution for the next period: ...Clear Glass Company’s investment banker has determined that the following rate schedule would apply if the firm raises funds by issuing new debt (bonds):Amount of New Debt Cost, rd$ 1 – $ 250,000 ........... ...Following is information about the common equity of Funtastic Furniture Company:Current selling price ............. $68.00Constant growth rate ............ 8.0%Most recently paid dividend, D0 ........ $3.50Flotation ...Sam’s Orthodontic Services (SOS) will retain for reinvestment $300,000 of the net income it expects to generate next year. Recently, the CFO determined that the firm’s after-tax cost of debt, rdT, is 5 percent; its cost ...Post your question