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Probability X Y 0.1 – 10% – 35% 0.2 2 0 0.4 12 20 0.2 20 25 0.1 38 45
a) Calculate the expected rate of return, ḱy, for Stock Y (ḱx = 12%). b) Calculate the standard deviation of expected returns, σx, for Stock X (σy = 20.35%). c) Calculate the coefficient of variation for Stock Y. d) Is it possible that most investors will regard Stock Y as being less risky than Stock X? Explain