Expected returns Stocks A and B have the following probability distributions of expected future returns:

Part A: Calculate the expected rate of return, rB, for Stock B (rA = 12.30%.) Do not round intermediate calculations. Round your answer to two decimal places.

Part B: Calculate the standard deviation of expected returns, A, for Stock A (B = 19.38%.) Do not round intermediate calculations. Round your answer to two decimal places.

Part C: Now calculate the coefficient of variation for Stock B. Round your answer to two decimal places.

Part D: Is it possible that most investors might regard Stock B as being less risky than Stock A?

(a) If Stock B is more highly correlated with the market than A, then it might have a lower beta than Stock A, and hence be less risky in a portfolio sense.

(b) If Stock B is more highly correlated with the market than A, then it might have the same beta as Stock A, and hence be just as risky in a portfolio sense.

(c) If Stock B is less highly correlated with the market than A, then it might have a lower beta than Stock A, and hence be less risky in a portfolio sense.

(d) If Stock B is less highly correlated with the market than A, then it might have a higher beta than Stock A, and hence be more risky in a portfolio sense.

(e) If Stock B is more highly correlated with the market than A, then it might have a higher beta than Stock A, and hence be less risky in a portfolio sense.

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Probability 0.1 0.2 0.4 0.2 0.1 -9% 990 -2690 15 18 30 19 28 50