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Excel Online Structured Activity: Evaluating risk and return Stock x has a 9.5% expected return, a beta c fficient of 0.8, and a 30% standard deviation of expected returns. Stock Y has a 12.5% expected return, a beta coefficient of 1.2, and a 25.0% standard deviation. The risk-free rates and the market risk premium is 5%. The data has been collected in the Microsoft Decal Online file below. Open the spreadsheet and perform the required analysis to answer the questions below. X1 .. Calculate each stock's coefficient of variation. Round your answers to two decimal places. Do not round intermediate calculations CV. - b. Which stock is risker for a diversified investors 1. For diversified investors the relevant is measured by standard deviation of expected returns. Therefore, the stock with the higher standard deviation of expected returns is more risky Stock X has the higher standard deviation so it is more risky than Stock 11. For diversified investore the relevant risk is measured by bota. Therefore, the stock with the lower bota is more risky, stock x has the lower bota so it is more risky than stock Y. III. For diverted into the relevant skiss ed by wtandard deviation of expected returns. Therefore, the stock with the lower standard deation of expected returns is more risky Stock Y has the lower standard deviations is more than Stock IV. For diverse to the relevantniss e by bet. Therefore the stock with the higher betaler Stock has the higher bata so it is rely than V. For diverted investors the relevant risk is measured by beta. Therefore, the stock with the higher bota is more risky Stock y has the higher bota so it is more ready than stock c. Calculate each stock's required rate of return. Round your answers to two decimal places. d. On the basis of the two stocks' expected and required returns, which stock would be more attractive to a diversified investor? e Calculate the required return of a portfolio that has $2,000 invested in Stock X and $7.500 invested in Stock Y. Do not round Intermediate calculations. Round your answer to two decimal places f. If the market risk premium increased to 6%, which of the two stocks would have the larger increase in its required return? C about:blank Excel template-Saved Fe Home Insert Data Review View Help T ell me what you want to do WT TVD Evangskandar 1250 Sock Y Descent of Sky Standard devono Stack Robert 12 Maritisk premium RP 800 500 Dollars of Shockport Delock inporte DOO 00 160000 17 Catoon Contoon torok Rerum portal song 32 Check 33 New required return, Stock X 34 Change in required return, Stock X 36 New required return Stock Y 37 Change in required return. Stock Y Stock with greater change in required return USSES Excel Online Structured Activity: Evaluating risk and return Stock x has a 9.5% expected return, a beta c fficient of 0.8, and a 30% standard deviation of expected returns. Stock Y has a 12.5% expected return, a beta coefficient of 1.2, and a 25.0% standard deviation. The risk-free rates and the market risk premium is 5%. The data has been collected in the Microsoft Decal Online file below. Open the spreadsheet and perform the required analysis to answer the questions below. X1 .. Calculate each stock's coefficient of variation. Round your answers to two decimal places. Do not round intermediate calculations CV. - b. Which stock is risker for a diversified investors 1. For diversified investors the relevant is measured by standard deviation of expected returns. Therefore, the stock with the higher standard deviation of expected returns is more risky Stock X has the higher standard deviation so it is more risky than Stock 11. For diversified investore the relevant risk is measured by bota. Therefore, the stock with the lower bota is more risky, stock x has the lower bota so it is more risky than stock Y. III. For diverted into the relevant skiss ed by wtandard deviation of expected returns. Therefore, the stock with the lower standard deation of expected returns is more risky Stock Y has the lower standard deviations is more than Stock IV. For diverse to the relevantniss e by bet. Therefore the stock with the higher betaler Stock has the higher bata so it is rely than V. For diverted investors the relevant risk is measured by beta. Therefore, the stock with the higher bota is more risky Stock y has the higher bota so it is more ready than stock c. Calculate each stock's required rate of return. Round your answers to two decimal places. d. On the basis of the two stocks' expected and required returns, which stock would be more attractive to a diversified investor? e Calculate the required return of a portfolio that has $2,000 invested in Stock X and $7.500 invested in Stock Y. Do not round Intermediate calculations. Round your answer to two decimal places f. If the market risk premium increased to 6%, which of the two stocks would have the larger increase in its required return? C about:blank Excel template-Saved Fe Home Insert Data Review View Help T ell me what you want to do WT TVD Evangskandar 1250 Sock Y Descent of Sky Standard devono Stack Robert 12 Maritisk premium RP 800 500 Dollars of Shockport Delock inporte DOO 00 160000 17 Catoon Contoon torok Rerum portal song 32 Check 33 New required return, Stock X 34 Change in required return, Stock X 36 New required return Stock Y 37 Change in required return. Stock Y Stock with greater change in required return USSES

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