$1.$ The $1-$year CD offers an interest rate of $2\%$ and the returns on the stocks of firm A and firm B over the next year in the three possible states are as follows:State $11$State $2$State $3$Probability$0\mathrm{.}40\mathrm{.}30\mathrm{.}3$RA$12\%6\%-8\%$RB$-2\%8\%4\%$In the table, Ra and Re represent the rates of return on stock A and stock B$,$ respectively.