EXPECTED RETURNS Stocks A and B have the following probability distributions of expected future returns: Probability A B 0.1 (10%) (35%) 0.2 3 0 0.3 11 19 0.3 19 27 0.1 32 47 Calculate the expected...

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Finance

EXPECTED RETURNS
Stocks A and B have the following probability distributions ofexpected future returns:
Probability A B
0.1 (10%) (35%)
0.2 3 0
0.3 11 19
0.3 19 27
0.1 32 47
Calculate the expected rate of return, r_B, for StockB (r_A = 11.80%.) Do not round intermediate calculations.Round your answer to two decimal places.
%
Calculate the standard deviation of expected returns,?_A, for Stock A (?_B = 21.10%.) Do not roundintermediate calculations. Round your answer to two decimalplaces.
%
Now calculate the coefficient of variation for Stock B. Roundyour answer to two decimal places.
Is it possible that most investors might regard Stock B as beingless risky than Stock A?
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 lessrisky in a portfolio sense.
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 asrisky in a portfolio sense.
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 lessrisky in a portfolio sense.
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 morerisky in a portfolio sense.
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 lessrisky in a portfolio sense.

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EXPECTED RETURNSStocks A and B have the following probability distributions ofexpected future returns:ProbabilityAB0.1(10%)(35%)0.2300.311190.319270.13247Calculate the expected rate of return, rB, for StockB (rA = 11.80%.) Do not round intermediate calculations.Round your answer to two decimal places.%Calculate the standard deviation of expected returns,?A, for Stock A (?B = 21.10%.) Do not roundintermediate calculations. Round your answer to two decimalplaces.%Now calculate the coefficient of variation for Stock B. Roundyour answer to two decimal places.Is it possible that most investors might regard Stock B as beingless risky than Stock A?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 lessrisky in a portfolio sense.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 asrisky in a portfolio sense.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 lessrisky in a portfolio sense.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 morerisky in a portfolio sense.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 lessrisky in a portfolio sense.