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please make sure you answer correctly Horreur x Dominic owns a two-stock portfolio that invests in Happy Dog Soap Company (HDS) and Black Sheep Broadcasting
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Horreur x Dominic owns a two-stock portfolio that invests in Happy Dog Soap Company (HDS) and Black Sheep Broadcasting (15h). Three quarters of Dominic's portfolio value consists of HDS's shares, and the balance consists or se's shares Each stock's expected return for the next year will depend on forecasted market conditions. The expected retums from the stocks in different market conditions are detailed in the following tables Market Condition Probability of Occurrence Happy Dog Soap Black Sheep Broadcasting Strong 0.25 20% 25% Normal 0.45 16% Wear 0.30 -16% -20% 12% Calcutate expected returns for the individual stocks in Dominic'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 or return on Happy Dog Soap's stock aver the next year is The expected rate of return on Black Sheep Broadcasting's stock over the next year is The expected rate of return on Dominic's portfolio over the next year is The expected returns for Dominic'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 stocks for two diferent companies are shown on the following graphi HARA probability distribution graph For example, the continuous probability distributions of rates of return on stocks for two different companies are shown on the following graph PROBABILITY ODSTV Company Company -40 -20 60 20 40 RATE OF RETURN Based on the graph's information, which statement is false? Company has lower risk Company G has lower risk Grade It Now Save & Continue Step by Step Solution
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