Problem 8-6 Expected returns Stocks A and B have the following probability distributions of expected future returns: A Probability -37% -15 % 0.1 0.2 0 21 14 0.3 29 23 0.3 42 29 0.1 a. Calculate the expected rate of return, rB, for Stock B (rA - 12.90 %.) Do not round intermediate calculations. Round your answer to two decimal places. % b. Calculate the standard deviation of expected returns, CA, for Stock A (aB- 21.39%. ) 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 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. I1. 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. II1. 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. IV. 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. V. 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