Consider the following two probability distributions of expected future returns for stocks A and B: Stock A Probability (%) 0.1 -2.5% 0.5 3 0.2 0.4 0.2 0.1 5 Return 9.5 Suppose you know that the expected rate of return for stock A is 3% and would like to calculate the expected return for stock B. Stock B (%) -8.75% 0 5 6.25 11.25 The expected rate of return for stock B is approximately Suppose you know that the standard deviation of expected returns for stock B is 5.0867% and would like to calculate the standard deviation of expected returns for stock A. Hint: Recall that the expected rate of return for stock A is 3%. True The variance of the expected returns for stock A is approximately approximately %. False %. Using your calculations in the previous parts of the problem, the coefficient of variation of stock B is approximately while the standard deviation of expected returns for stock A is True or False: Investors will always view the stock with a lower coefficient of variation as a "safer" choice when compared to a stock with a higher coefficient of variation.

Consider the following two probability distributions of expected future returns for stocks A and B: Suppose you know that the expected rate of return for stock A is 3% and would like to calculate the expected return for stock B. The expected rate of return for stock B is approximately %. Suppose you know that the standard deviation of expected returns for stock B is 5.0867% and would like to calculate the standard deviation of expected returns for stock A. Hint: Recall that the expected rate of return for stock A is 3%. The variance of the expected returns for stock A is approximately While the standard deviation of expected returns for stock A is approximately W. Using your calculations in the previous parts of the problem, the coeffident of variation of stock B is approximately True or False: Investors will always view the stock with a lower coeffident of variation as a "safer" choice when compared to a stock with a higher coefficient of variation. True False