Excel Online Structured Activity: Evaluating risk and return Stock X has a 10.0% expected return, a beta coefficient of 0.9, and a 40% standard deviation of expected returns. Stock Y has a 12.5% expected return, a beta coefficient of 1.2, and a 25.0% standard deviation. The risk-free rate is 6%, and the market risk premium is 5%. The data has been collected in the Microsoft Excel Online file below. Open the spreadsheet and perform the required analysis to answer the questions below. Open spreadsheet a. Calculate each stock's coefficient of variation, Round your answers to two decimal places. Do not round intermediate calculations CV- CV- b. Which stock riskler for a diversified Investor For diversified investors the relevant rlik is measured by bata. Therefore, the stock with the higher beta is more risky Stock Y has the higher beta so it is more ricky than Stock X 11. 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. m. For diverulfied investors the relevant risk is measured by beta. Therefore, the stock with the lower beta is more risky Stock X has the lower beta to it is more risky than Stock IV. For diversified investors the relevant risk is measured by standard deviation of expected returns. Therefore, the stock with the lower standard deviation of expected returns is more tisky Stock has the lower standard deviation so it is more risky than Stock X. V. 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 Jess risky than Stock x Band Search this P aluating risk and return 1. HUIS WOHL IM WHERE CALL US expected returns is more risky. Stock X has the higher standard deviation so it is more risky than Stock Y. TIL. 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 IV. For diversified investors the relevant risk is measured by standard deviation of expected returns. Therefore, the stock with the lower standard deviation of expected returns is more risky. Stock Y has the lower standard deviation so it is more risky than Stock X. V. 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 c. Calculate each stock's required rate retur. Round your answers to two decimal places. d. On the basis of the two stocks expected and required returns, which stock would be more attractive to a diversified investor? Calculate the required return of a portfolio that has $4.000 invested in Stock X and $3,000 invested in stock Y. Do not round intermediate calculations. Round your answer to two decimal places to the market risk premium increased to 6%, which of the two stocks would have the larger increase in its required return? B D Evaluating risk and retum Expected return of Stock X Bela coefficient of Stock X Standard deviation of Stock X returns 10.00% 0.90 40.00% Expected return of Stock Y Beta coefficient of Stock Y Standard deviation of Stock y returns 12.50% 1.20 25.00% 6.00% 5.00% $4,000.00 $3,000.00 Formulas #NIA #NIA Risk-free rate (TE) Market risk premium (RPM) 3 4 Dollars of Stock X in portfolio 5 Dollars of Stock Y in portfolio 7 Coefficient of Variation for Stock X 8 Coefficient of Variation for Stock Y 9 Riskier stock to a diviersified investor 41 2 Required return for Stock X 3 Required return for Stock Y 25 Stock more attractive to a diversified investor 26 Required return of portfollo containing 27 Stocks X and Y in amounts above 28 29. New market risk premium #N/A #N/A #N/A 24 #N/A #NIA 6.00% With new market risk premium stock with larger