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Rate of Return if State Occurs State of Probability of State Economy of Economy Stock A Stock B Recession 0.21 -0.38 -0.08 Normal 0.61 0.13

Rate of Return if State Occurs State of Probability of State Economy of Economy Stock A Stock B Recession 0.21 -0.38 -0.08 Normal 0.61 0.13 0.11 Boom 0.18 0.53 0.19 What is TRUE about these two stocks? Stock A and Stock B have the same variance Stock A has the higher variance Stock B has the higher variance O Stock B has a higher standard deviation than Stock A's standard deviation

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