Please show all steps and formula. Question 12.

2 19 232% o B. 8.74 percent C. 8.65 percent D. 9.05 percent E. 9.28 percent 12. You are comparing stock A to stock B. Given the following information, what is the difference in the expected returns ofthese two securities? State of Economy Normal Recession A. -0.85 percent B. [ .95 percent C. 2.05 percent D. 13.45 percent E. 13.55 percent Probability of State of Economy 55% Rate of Return if State Occurs Stock A Stock B -22% 17% -28% 13. Jerilu Markets has a beta of I .09. The risk-free rate of return is 2.75 percent and the market rate of return is 9.80 percent. What is the risk premium on this stock? A. 6.47 percent B. 7.03 percent C. 7.68 percent