Statisticalmeasures of standalone risk

Suppose Maria owns a two$-$stock portfolio that invests in Falcon Freight Company $($FF$)$ and Pheasant Pharmaceuticals $($PP$).$ Three$-$quarters of Maria's

portfolio value consists of Falcon Freight's shares, and the remaining balance consists of Pheasant Pharmaceuticals'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 the expected returns for the individual stocks in Maria'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 Maria's portfolio over the next year is