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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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