State of Economy Probability of State of Economy Rate of Return if State Occurs

Stock A Stock B

Recession $\mathrm{.}04\mathrm{.}097\mathrm{.}102$

Normal $\mathrm{.}72\mathrm{.}114\mathrm{.}133$

Boom $\mathrm{.}24\mathrm{.}156\mathrm{.}148$

The market risk premium is $7\mathrm{.}4$ percent, and the risk$-$free rate is $3\mathrm{.}1$ percent. The beta of Stock A is $\_\_\_\_\_$ and the beta of Stock B is $\_\_\_\_\_.$

A$)1\mathrm{.}25$; $1\mathrm{.}89$

B$)1\mathrm{.}47$; $1\mathrm{.}76$

C$)1\mathrm{.}21$; $1\mathrm{.}76$

D$)1\mathrm{.}47$; $1\mathrm{.}41$

E$)1\mathrm{.}25$; $1\mathrm{.}41$