Kathleen has two investment opportunities. She can invest in The Sunglasses Company or the Umbrella Company. She estimates there
is a 75% chance it will remain sunny and Sunglasses Co. stock will rise 50% and Umbrella Co. stock will stay flat. She also estimates there is a 25% chance it will rain and Sunglasses Co. stock will remain flat and Umbrella Co. stock will rise by 25%. If she diversifies her investment by putting 50% of her money in each company, what is the expected return and standard deviation of her portfolio
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