Question: Please show work in excel Click here to read the eBook: Stand-Alone Risk EXPECTED RETURNS Stocks A and B have the following probability distributions of

Please show work in excelPlease show work in excel Click here to read the eBook: Stand-Alone

Click here to read the eBook: Stand-Alone Risk EXPECTED RETURNS Stocks A and B have the following probability distributions of expected future returns: Probability B A (9%) 0.1 (21%) 0 0.2 0.3 13 22 0.2 23 27 0.2 30 41 a. Calculate the expected rate of return, r, for Stock B (rA = 14.60%.) Do not round intermediate calculationns. Round your answer to two decimal places b. Calculate the standard deviation of expected returns, aA, for Stock A (oB 18.54%.) Do not round intermediate calculations. Round your answer to two decimal places. % c. Now calculate the coefficient of variation for Stock B. Round your answer to two decimal places. d. Is it possible that most investors might regard Stock B as being less risky than Stock A? I. 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 portfolio sense. bicho II. 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 III. 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 portfolio sense. IV. 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. V. 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. -Select

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