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Consider the following probability distribution for stocks A and B: State Probability Return on Stock A Return on Stock B 1 0.10 10% 8% 2

Consider the following probability distribution for stocks A and B:

State Probability Return on Stock A Return on Stock B
1 0.10 10% 8%
2 0.20 13 7
3 0.20 12 6
4 0.30 14 9
5 0.20 15 8

The expected rates of return of stocks A and B are _____ and _____, respectively

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14%; 10%

13.2%; 7.7%

13.2%; 9%

7.7%; 13.2%

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