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David owns a two-stock portfolio that invests in Falcon Freight Company (FF) and Pheasant Pharmaceutcals (PP). Three-quarters of David's portolio value consists of FF's shares,

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David owns a two-stock portfolio that invests in Falcon Freight Company (FF) and Pheasant Pharmaceutcals (PP). Three-quarters of David's portolio 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 fomm the stocks in different market conditions are detaled in the folowing table: Calculate expected retums for the individual stocks in David's portfolio as welf as the expected rate of return of the entire portfolio over the thriee poss ble 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 David's portfolo over the next year is The expected retums for David's portfolio were calcutsted based on three possble conthpons in the market such conditions wall vary fiom time to bmit, and for each condition there will be a specfic outcome. These probabilites and outcomes can be eepresented in the form of a continuous probubility distribution araph. For example, the continuous probablity distribubions of rates of return on stocks for two deferent companies are thowivon the folowing araphil For example, the continuous probabitity distnbutions of rates of return on stocks for two different companies are shown on the following graph: Based on the graph's information, which company's teturns exhibit the greater risk? Company H Company G

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