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You are given the probability distribution of stock returns on Sprouts Farmers Market Inc. and Natural, Grocers Inc. Portfolio O is made up of 40%
You are given the probability distribution of stock returns on Sprouts Farmers Market Inc.
and Natural, Grocers Inc. Portfolio O is made up of 40% of money invested in the Sprouts
stock and 60% in the Natural Grocers stock.
Probability
0.40
0.30
0.30
Sprouts
16%
9%
3%
Natural Grocers
12%
9%
10%
Expected Return 10.0% 10.5%
Standard Deviation5.4222%1.2845%
a) Compute the expected return and standard deviation of returns for Portfolio O.
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