What is the stand-alone risk 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: EM132481262

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