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(Computing the expected rate of return and risk) After a tumultuous period in the stock market, Logan Morgan is considering an investment in one of
(Computing the expected rate of return and risk) After a tumultuous period in the stock market, Logan Morgan is considering an investment in one of two portfolios Given the information that follows, which investment is better, based on risk (as measured by the standard deviation) and retum as measured by the expected rate of return? Portfolio B Portfolio A Probability 0.22 0.50 0.28 Return - 4% 20% 25% Probability 0.08 0.25 0.38 0.29 Return 3% 10% 13% 17% a. The expected rate of return for portfolio A is 15.56 %. (Round to two decimal places.) The standard deviation of portfolio A is 10.47 %. (Round to two decimal places.) b. The expected rate of return for portfolio B is %. (Round to two decimal places.) The standard deviation of portfolio B is %.(Round to two decimal places.)
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