Question: Return Stock A Stock B (%) (%) Probability 0.1 -2.5% -8.75% 0.2 0.5 0 0.4 3 5 0.2 5 6.25 0.1 9.5 11.25 Suppose you

 Return Stock A Stock B (%) (%) Probability 0.1 -2.5% -8.75%

Return Stock A Stock B (%) (%) Probability 0.1 -2.5% -8.75% 0.2 0.5 0 0.4 3 5 0.2 5 6.25 0.1 9.5 11.25 Suppose you know that the expected rate of return for stock A is 3% and would like to calculate the expected return for stock B. The expected rate of return for stock B is approximately 13.75 %. Suppose you know that the standard deviation of expected returns for stock B is 5.0867% and would like to calculate the standard deviation of expected returns for stock A. Hint: Recall that the expected rate of return for stock A is 3%. while the standard deviation of expected returns for stock A is The variance of the expected returns for stock A is approximately approximately %. Using your calculations in the previous parts of the problem, the coefficient of variation of stock B is approximately True or False: Investors will always view the stock with a lower coefficient of variation as a "safer" choice when compared to a stock with a higher coefficient of variation. True False

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