Stock X has a 10% expected return, a Beta coefficient of .9, and a 35% standard deviation of expected return. Stock Y has a 12.5% expected return, a bet coefficient of 2, and a 25% standard deviation. The risk free rate is 2% and the market risk premium is 5%

2. Calculate each stock’s coefficient of variation.
4. Which stock is riskier?
6. Calculate each stock’s required rate of return.
8. Calculate the required rate of return of a portfolio that has $7,500 invested in Stock X and $2,500 invested in Stock Y.

Answer rating: 100% (QA)

To calculate each stocks coefficient of variation we use the formula Coefficient of Variation Standa... View the full answer