You are comparing stock A to stock B. Given the following information, which one of these two stocks should you prefer and why?

		Returns if State Occurs
State of Economy	Probability of State of Economy	Stock A	Stock B
Boom	70%	15%	9%
Normal	30%	-8%	6%

	A; because it has an expected return which is 0.3% higher than stock B.
	A; because it has an expected return of 8.4%.
	B; because it has the same return as stock A and is less risky.
	B; because it has a higher expected return than stock A.