Calculate stock coefficient of variation

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Stock X has a 10% expected return, a beta coefficient of 0.9, and a 35% standard deviation of expected returns. Stock Y has a 12.5% expected return, a beta coefficient of 1.2, and a 25% standard deviation. The risk-free rate is 6%, and the market risk premium is 5%.

a. Calculate each stock's coefficient of variation (CV) and comment on its risk-adjusted returns

b. Calculate the required return and standard deviation of a portfolio that has RM7,500 invested in Stock X and RM2,500 invested in Stock Y. (assuming that the covariance is 12)

Reference no: EM133116633

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