Remember, the expected value of probability distribution is a statistical measure of the average mean value expected to occur during all possible circumstances to compute an assets expected return under a range of possible circumstances (or states of nature), multiply the anticipated retur expected to resultourino nach state of nature by its probability of occurrence Consider the folowing case: fan owns a two-stock portfolio that wests in Celestial Crane Cosmetics Company (CCC) and Lumbering Ox Truckermakers (LOT). Three quarters of lon's portfoto value consists of OCC's shes, and the balance consists of LOT's shares Each stock's expected return for the next year wil depend on forecasted market conditions. The expected returns from the stocks in different market conditions are detailed in the following tablet Market Condition Probability of Occurrence Celestial Crane Cosmetice Lumbering Ox Truckmakers Streng 0.50 42.5% Normal 0.25 25.5% 34 Weak 0.25 -34% -12.5% Calculate expected returns for the individual stocks in tan'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 Celestial Crane Cosmetics's stock over the next year is The expected rate of return on Lumbering Ox Truckmakers's stock over the next years The expected rate of return on tan's portfolio over the next year is The expected returns for lan's portfolio were calculated based on three possible condition 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 probably datributions of rates of return on stocks for two different companies are nown on the following graph: PROBABLY UNITY Com con KATE OF Based on the graph information, which statement is false? Company has lower risk Company has lower risk