. Information regarding two stocks appears below:

State of Returns for Economy, Boom, normal, recession

Probability, 30%, 40%, 30%

Stock A, 100%, 15%, -70%

Stock B, 20%, 15%, 10%

Which of the following statements regarding Stocks A and B is true? [Note: you do not need to calculate standard deviation; you merely need to look at the figures to see which stock has a higher deviation.]

a. Stock A has a higher expected return than Stock B, but Stock A is more risky because it has a lower standard deviation.

b. Stock A has the same expected return as Stock B, but Stock A is more risky because it has a higher standard deviation.

c. Stock B has the same expected return as Stock A, but Stock B is more risky because it has a higher standard deviation.

d. Stock B has a higher expected return than Stock A, but Stock B is less risky because it has a lower standard deviation.

e. Both stocks have the same expected returns and the same standard deviations.