Evaluating risk and return. Stock X has an expected return of
9.5 percent, a beta coefficient of 0.9, and a 30 percent standard
deviation of expected returns. Stock Y has a 13 percent expected
return, a beta coefficient of 1.3, and a 20 percent standard
deviation. The risk-free rate is 5 percent, and the market risk
premium is 5.5 percent.
a) Calculate the coefficient of variation of each stock.
b) Which stock is riskier for diversified investors? Which stock
is...