23) Consider the following information on stocks A and B:

State of Probability of Rate of Return if State Occurs

Economy State of Economy Stock A Stock B

Recession 6% 15% -35%

Normal 69% 35% 35%

Boom 25% 43% 45%

The market risk premium is 8 percent, and the risk-free rate is 3.6 percent. The beta of stock A is ________ and the beta of stock B is ________.

A) 2.08; 2.47

B) 4.03; 3.71

C) 4.47; 3.89

D) 2.08; 2.76

E) 3.21; 3.84