Question 36 (3 marks) Consider the following information about Stocks A and B. The market risk premium is 7%, and the risk-free rate is 3%. State of economy Rate of Return if State Occurs Probability of state of economy Recession 0.16 Normal Irrational exuberance 0.70 0.15 Which of the two stocks has higher total risk? Stock A Stock B 0.02 -0.25 0.21 0.09 0.06 0.44 a. Stock B because its expected return is higher than that if Stock A b. Stock A because its standard deviation is higher than that of Stock B c. Stock B because its standard deviation is higher than that of Stock A d. The total risks for the two stacks cannot be compared due to inadequate information. Oa. Ob O Od