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Stock. A will return 10 percent in a boom and 5 percent in a resession, Stock 8 will return 16 percent in a boom and

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Stock. A will return 10 percent in a boom and 5 percent in a resession, Stock 8 will return 16 percent in a boom and lose 5 percent in a recession. The probability of a boom is 60 percent with a 40 percent chance of a recession. Which one of these two rtocks should yeu prefer and why? StockA; because it has a sightly lowet expected retum but appears lo be stignificanty less risky than Slock B Slock B; becouse it has a tigher expected return and appeass to be less risky than Slock A Slock A; because it has a tigher expected return and appears to be more miky foan Stock B Stock A, because it has a tigher expected retum and oppears to be less tisky thon Srock B

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