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Ch 08-Assignment - Risk and Rates of Return TOTAL Juan owns a two-stock portfolio that invests in Foicon Freight Company (FF) and Pheasant Pharmaceuticals (PP).

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Ch 08-Assignment - Risk and Rates of Return TOTAL Juan owns a two-stock portfolio that invests in Foicon Freight Company (FF) and Pheasant Pharmaceuticals (PP). Three-quarters of Juan's portfolio value consists of FF's shares, and the balance consists of PP's shares. Each stock's expected return for the next year will depend on forecasted market conditions. The expected returns from the stocks in different market conditions are detailed in the following table: Calculate expected returns for the individual stocks in Juan's portfolio as well as the expected rate of return of the entire portfolio over the three possible market conditions next year. - The expected rote of return on Falcon Freight's stock over the next year is - The expected rate of return on Pheasant Pharmaceuticals's stock over the - The expected rate of return on Juan's portfolio over the next year is 11.20% 9.52%5 The expected returns for Juan's portfolio were calculated based on three poss and for each condition there will be a specific outcome. These probabilities an 13.44% Ons in the market. Such conditions wil vary from time to time, distribution graph. can be represented in the form of a continuous probability 15.12% For example, the continuous probability distributions of rates of return on stocks for two different companies are shown on the foliowing graph: Juan owns a two-stock portfolio that invests in Falcon Freight Company (FF) and Pheasant Pharmaceuticals (PP). Three-quarters of Juan's portfolio value consists of FF's shares, and the balance consists of pp's shares. Each stock's expected return for the next year will depend on forecasted market conditions. The expected returns from the stocks in different market conditions are detailed in the following tabie: Calculate expected returns for the individual stocks in Juan's portolio as well as the expected rate of return of the entire portfolio over the three. possible market conditions next year. - The expected rote of return on Falcon Freight's stock over the next year is - The expected rate of return on Pheasant Pharmaceuticals's stock over the next year is - The expected rate of retum on Juan's portfolio over the next year is The expected returns for Juan's portfolio were calculated based on three possible conditio and for each condition there will be a specific outcome. These probabilities and outcomes distribution graph. For example, the continuous probability distributions of rates of return on stocks for two 20.34% mpanies are shown on the following graph: For example, the continuous probability distributions of rates of return on stocks for two different companies are shown on the following graph: Based on the graphs information, which statement is false? Company H has lower risk. Company G has lower risk. Juan owns a two-stock portfolio that invests in Faicon Freight Company (FF) and Pheasant Pharmaceuticals (PP). Three-quarters of Juan's portiolio value consists of Fif's shares, and the balance consists of PP's shares: Each stock's expected return for the next year will depend on forecasted market conditions. The expected returns from the stocks in different market conditions are detalled in the following table: Calculate expected returns for the individual stocks in Juan's portfolio as well as the expected rate of return of the entire portfolio over the three possible market conditions next year. - The expected rate of return on Fakon Freight's stock over the next year is - The expected rate of return on Pheasant Pharmaceuticals's stock over the next year is - The expected rate of return on Juan's portfolio over the next year is The expected returns for Juan's portfolio were calculated based on thre and for each condition there wil be a specific outcome. These probabili 12.50% fonditions in the market. Such conditions will vary from time to time, distribution graph. For example, the continuous probability distributions of rates of return 15.00%

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