Consider the following case Tyler owns a two stock portfolio that invests in Falcon Freight Company (FF) and Pheasant Pharmaceuticals (PP). Three-quarters of Tyler'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: Market Condition Strong Normal Weak Probability of Occurrence Falcon Freight Pheasant Pharmaceuticals 0.50 12.5% 17.5% 0.25 7.5% 10% 0.25 -10% -12.5% Calculate expected returns for the individual stocks in Tyler'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 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 return on Tyler's portfolio over the next year is The expected returns for Tyler's portfolio were calculated based on three possible conditions in the market. Such conditions will vary from time to time, and for each condition there will be a specific outcome. These probabilities and outcomes can be represented in the form of a continuous probability Calculate expected returns for the individual stocks in Tyler's portfolio as well as the expected rate of return of the citire portfolio over the three possible market conditions next year. The expected rate 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 return on Tyler's portfolio over the next year is The expected returns for Tyler's portfolio were calculated based on three possible conditions in the market. Such conditions will vary from time to time, and for each condition there will be a specific outcome. These probabilities and outcomes can be represented in the form of a continuous probability distribution graph For example, the continuous probability distributions of rates of return on stock for two different companies are shown on the following graph: PROBABILITY DENSITY Company Company