What is the expected rate of return for stock

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Stock A's possible returns and related probabilities are as follows:

Products Demand          Weak              Average            Strong

Probability                      0.2                0.6                0.2

Return                          10%              15%                20%

Question 1: What is the expected rate of return for stock A?

Question 2: What is the stand-alone risk for stock A?

Question 3: What is the benefit of holding a portfolio in lieu of a single stock?

Reference no: EM132481065

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