Differentiate between realized and expected returns

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Reference no: EM131488138

Question: 1. Differentiate between realized and expected returns.

2. What effect will diversifying your portfolio have on your returns and your level of risk?

3. (Expected return and risk) Universal Corporation is planning to invest in a security that has several possible rates of return. Given the following probability distribution of returns, what is the expected rate of return on the investment? Also compute the standard deviations of the returns. What do the resulting numbers represent?

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Reference no: EM131488138

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