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2. Statistical measures of stand-alone risk come risk A Aa E Ethan holds a two-stock portfolio that invests in the stocks of Spandelay Industries Inc.

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2. Statistical measures of stand-alone risk come risk A Aa E Ethan holds a two-stock portfolio that invests in the stocks of Spandelay Industries Inc. and Rouster and Sideways Corp. Spandelay Industries Inc. has an allocation of 75% in Ethan's portfolia. Each stock's expected return for the next year will depend on the market condition. The expected returns from the stocks in different market conditions. are given in the following table: 12 Market Condition Probability Spandelay Industries Ine. Rouster and sideways Corp. Strong = 0.50 18% 25% Normal 0.25 -144 -18490 0.25 Weak Using the information just given, calculate the expected rate of return on the individual stocks in Ethan's portfolio and the expected rate of return on the entire portfolio over the next year. The expected rate of return on Spandelay Industries Inc.'s stock over the next year is The expected rate of return on Rouster and Sideways Comp.'s stock over the next year is The expected rate of return on Ethan's portfolio over the next year is

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