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You are comparing Stock A to Stock B. Given the following information, what is the difference in the expected returns between Stock A and Stock

You are comparing Stock A to Stock B. Given the following information, what is the difference in the expected returns between Stock A and Stock B?

State of Economy Probability of State of Economy Rate of Return if State Occurs
Stock A Stock B
Normal .65 .25 .06
Recession .35 .26 .05

5.0%

2.7%

4.1%

10.2%

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