1. Statistical measures of standalone A Aa Remember, the expected value of a probabilit expected to occur during all possible circumstances (or states of its probability of occurrence OE measure of the average (mean) value expected return under a range of possible ed to result during each state of nature by EU Consider the following case: Tyler owns a two-stock portfolio that in (HWE). Three-quarters of Tyler's portfolio value Mining Company (BLM) and Hungry Whale Electronics BLM's shares, and the balance consists of HWE's shares. 5 Each stock's expected return for the next year will depend on forecasted market conditions. The expected returns from the stocks in different market cond in the following table: - 95 - rence Blue Llama Mining Hungry Whale Electronics Market Condition Probability Strong Normal 35% Weak 11% 14% 14% -18% Calculate expected returns for the individual stocks in Tyler'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 Blue Lama Mining's stock over the next year is The expected rate of return on Hungry Whale Electronics's stock over the next year The expected rate of return on Tyler's portfolio over the next year is The expected returns for Tyler'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 different companies are shown on the following graph: Company H 0 20 40 60 RATE OF RETURN (Percent) Based on the graph's information, which statement is false? Company H has lower risk. Company G has lower risk