Briefly explain how diversification can reduce risk

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Reference no: EM132622708

(a) The following table shows the one-year return distribution of Startup, Inc. Calculate

(i) The expected return.

(ii) The standard deviation of the return.

Probability 40% 30% 30%

Return -10% -5% 45%

b) Briefly explain how diversification can reduce risk.

Reference no: EM132622708

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