The common stock of Leaning Tower of Pita, Inc., a restaurant chain, will generate the following payoffs to investors next year:
	Probability	Dividend	Stock Price
Boom	0.3	7.00	190.00
Normal economy	0.5	3.00	116.00
Recession	0.2	0.00	0.00
The stock is selling today for $96.
Calculate the expected return and standard deviation of a portfolio half invested in Escapist and half in Leaning Tower of Pita.
(Do not round your intermediate calculations and round your final answers to 2 decimal places. Use the minus sign for negative numbers if it is necessary.)
Expected return of portfolio ____ %
Standard deviation of portfolio ____ %
Why is the portfolio standard deviation lower than for either stocks individually?
The portfolio standard deviation is lower than for either stocks individually because _____