The distributions of rates of return for Companies AA and BB are given below: State of the Economy. Boom Normal Recession Probability of This State Occurring True False 0.2 0.6 0.2 AA BB 30% -10% 10% 5% -5% 50% We can conclude from the above information that any rational, risk-averse investor would be better off adding Security AA to a well-diversified portfolio over Security BB