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You are comparing Stock A to Stock B. Given the following information, what is the difference in the expected returns of these two securities? State

You are comparing Stock A to Stock B. Given the following information, what is the difference in the expected returns of these two securities?

State of Economy Probability of State of Economy Rate of Return if State Occurs
Stock A Stock B
Normal 45% 12% 17%
Recession 55% -22 -31
-0.85 percent
2.70 percent
3.05 percent
13.45 percent
13.55 percent

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