Question: 2. Answer both Part(a) and Part(b) below (a) Roenfeld Corp believes the following probability distribution exists for its stock. What is the coefficient of variation

2. Answer both Part(a) and Part(b) below (a) Roenfeld Corp believes the following probability distribution exists for its stock. What is the coefficient of variation on the company's stock? [10 points] State of the Economy Boom Normal Recession Probability of State Occurring 0.45 0.50 0.05 Stock's Expected Return 25% 15% 5% (0) Mikkelson Corporation's stock had a required return of 11.75% last year, when the risk- free rate was 5.50% and the market risk premium was 4.75%. Then an increase in investor risk aversion caused the market risk premium to rise by 2%. The risk-free rate and the firm's beta remain unchanged. What is the company's new required rate of return? (Hint: First calculate the beta, then find the required return. [10 points)

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