Question: Please only work on this is you understand it. Please also provide how to solve using excel, thank you. 8-6 EXPECTED RETURNS Stocks A and
Please only work on this is you understand it. Please also provide how to solve using excel, thank you.

8-6 EXPECTED RETURNS Stocks A and B have the following probability distributions of expected future returns: a. Calculate the expected rate of return, rB, for Stock B(rA=12%). b. Calculate the standard deviation of expected returns, A, for Stock A (B=20.35%). Now calculate the coefficient of variation for Stock B. Is it possible that most investors will regard Stock B as being less risky than Stock A? Explain. c. Assume the risk-free rate is 2.5%. What are the Sharpe ratios for Stocks A and B? Are these calculations consistent with the information obtained from the coefficient of variation calculations in part b? Explain
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