EVALUATING RISK AND RETURN Stock X has a 10.5 % expected return, a beta coefficient of 1.0, and a 35 % standard deviation of expected returns. Stock Y has a 12.0 % expected return, a beta coetticient of 1.1, and a 20.0 % standard deviation. The risk-free rate is 6 % , and the market risk premium is 5 % a Calculate each stock's coefficient of variation. Round your answers to two decimal places. Do not round intermediate calculations. CV CVy b. Which stock is riskier for a diversified investor? . 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 more risky. Stock X has the higher standard deviation so it is more risky than Stock Y II For diversified investors the relevant risk is measured by beta. Therefore, the stock with the lower beta is more risky. Stock X has the lower beta so it is more risky than Stock Y IlI. For diversified investors the relevant risk is measured by standard deviation of expected retuns. Therefore, the stock with the lower standard deviation of expected retuns is more risky. Stock Y has the lower standard deviation so it is more risky than Stock X IV. 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 risky than Stock X v. For diversified investors the relevant risk is measured by beta. Therefore, the stock with the higher beta is more risky. Stock Y has the higher beta so it is more risky than Stock X. Select c. Calculate each stock's required rate of retun. Round your answers to two decimal places y d. On the basis of the two stocks' expected and required retums, which stock would be more atractive to a diversified investor? -Select . Calculate the required retum of a portiolio that has $2,500 invested in Stock X and $3,000 invested in Stock Y. Do not round intermediate cakculations. Round your answer to two decimal places. p f. I the market risk premium increased to 6%, which of the two stocks would have the larger increase in ts required return? Select Grade It New Save&Continue Continue without saving