Problem 8-6 Expected returns Stocks A and B have the followingprobability distributions of expected future returns: Probability AB 0.1 -10% -29% 0.2 6 0 0.4 10 24 0.2 18 28 0.1 30 37 Calculate theexpected rate of return, rB, for Stock B (rA = 10.80%.) Do notround intermediate calculations. Round your answer to two decimalplaces. % Calculate the standard deviation of expected returns, ?A,for Stock A (?B = 18.77%.) Do not round intermediate calculations.Round your answer to two decimal places. % Now calculate thecoefficient of variation for Stock B. Round your answer to twodecimal places. Is it possible that most investors might regardStock B as being less risky than Stock A? If Stock B is more highlycorrelated with the market than A, then it might have a lower betathan Stock A, and hence be less risky in a portfolio sense. IfStock B is more highly correlated with the market than A, then itmight have the same beta as Stock A, and hence be just as risky ina portfolio sense. If Stock B is less highly correlated with themarket than A, then it might have a lower beta than Stock A, andhence be less risky in a portfolio sense. If Stock B is less highlycorrelated with the market than A, then it might have a higher betathan Stock A, and hence be more risky in a portfolio sense. IfStock B is more highly correlated with the market than A, then itmight have a higher beta than Stock A, and hence be less risky in aportfolio sense.