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State of the Economy Probability of this state occurring AA BB Boom 0.2 30% -10% Noral 0.6 10% 5% Recession 0.2 -5% 50% We can

State of the Economy Probability of this state occurring AA BB Boom 0.2 30% -10% Noral 0.6 10% 5% Recession 0.2 -5% 50% We can conclude from the above information that any rational, risk averse investor would be better off addig Secuity AA to a well-diversified portfoio over Security BB. True or False

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